You’d have to live under a rock to not have heard about Dogecoin’s meteoric rise. We have a closer look at the cryptocurrency that’s turning heads.
Dogs are man’s best friend, worthy of trust with our most shameless secrets and, apparently, our cryptocurrency investments. Dogecoin is currently the hottest crypto on the block, with recent growth outpacing any other investment like a champion greyhound overtaking an aging pug.
So, is Dogecoin legit or is it just a wolf in dog’s clothing? We do a deep dive to figure out heads from tails, buy from bust, and doge from coin.
What Is It?
According to its official website, Dogecoin is “an open-source peer-to-peer digital currency, favoured by Shiba Inus (yes, Asia’s favourite dog species) worldwide.” Now that’s a glowing endorsement if we’ve ever seen one.
Dogecoin was created in 2013 by a duo of software engineers as a bit of a laugh. They developed the coin to poke fun at bitcoin and the many other cryptocurrencies that were all claiming to revolutionize the world. Created in the likeness of the ever-popular “doge” Shiba Inu meme, Dogecoin holders are now laughing all the way to the bank.
The digital currency went on a mind-bending bull run over the last six months, climbing by 26,000%. It’s now the 5th largest cryptocurrency with a market capitalization of $92 billion. Too-cool-for-school older brothers Bitcoin and Ethereum went up a meagre 286% and 698% respectively over the same period.
Mati Greenspan, the founder of Quantum Economics, has this to say on the meteoric rise of Dogecoin: “The joke is on Wall Street this time. What you have is a situation where teens on TikTok are outperforming even the smartest suits by thousands of percentage points.”
It’s Kinda Musky In Here
Dogecoin has captured the heart and mind of hipster icon and barefoot advocate Elon Musk for a number of years now. While it isn’t clear what initially drew him to the cryptocurrency, it’s undeniable that he has played a huge role in its rise to the front of the pack (get it?).
Musk’s endorsements have been both glowing and numerous. He’s knighted Dogecoin as the “people’s crypto” and has even promised to plant an actual Dogecoin token on the moon, presumably on a stopover en route to colonize Mars. More recently his Musk said his company SpaceX will accept payment for cargo with the crypto. However, his recent joke during an SNL skit, in which he admitted the coin was a hustle, saw values drop overnight.
Supreme Leader Musk has an almost cult-like following, so his endorsements have mobilized fund managers and Minecraft enthusiasts alike to take the value of the Doge sky-high. Other celebrities have also backed the coin, with Mark Cuban, Kiss bassist Gene Simmons and the OG dog himself Snopp getting in the mix.
However, Dogecoin doesn’t owe all of its success to celebrity backing. A perfect storm of market conditions such as multiple rounds of stimulus checks, casual investment apps like Robinhood, and bored people stuck at home due to lockdowns have all combined to give us Dogecoin as we know it today.
Also giving Dogecoin its incredible momentum is the rallying cry of meme-lovers the world over to stick it to the system. Avi Felman, Head of Trading at BlockTower Capital says, “Dogecoin is like this kind of big F-U to the system. It’s like ‘Yeah, this thing can have value, too. And I’m just going to buy it because I’m going to buy it.”
It’s all very reminiscent of the GameStop trading craze that had Wall Street vets cowering at the united might of an online populace intent on sticking it to the man, Jack Black style.
The true power of Dogecoin lies in the fact that it started out as a joke, as a meme. Its satirical beginnings have made it the poster child of misfit-done-good. People love a good story, and the rags-to-riches nature of dogecoin has got the imagination of people firing the world over.
Should You Go Doge?
So is it worth trusting a Shibu Inu to grow your investment? There are ongoing questions about the inherent value of dogecoin. Its low levels of adoption make it unusable as a substitute for currency. It’s also designed to be highly inflationary due to the fact that there is no lifetime cap on the number of Dogecoins that can be mined.
These limitations to the stability and practicality of Dogecoin hint that the value of the currency is purely speculative. This means that the currency’s value is based on people believing it has a value that can be capitalized on by selling it to people who are willing to pay even more for it.
These are hardly firm foundations to bank your life savings on, like any other cryptocurrency. However, this doesn’t mean that Dogecoin is worthless. It’s definitely worth buying a few Dogecoins with any money you’re willing to lose.
The worst-case scenario is that you lose a couple of day’s worth of lunch money, while the best case is that you make such a huge profit that you can become that annoying guy at the bar raving about cryptocurrencies changing the world, one doge at a time.
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Disclaimer: Alpha Men Asia is not a registered investment, legal or tax advisor or a broker/dealer. All investment/financial opinions expressed by or published on Alpha Men Asia are from the personal research and experience of the owner of the site and/or the author of the story and are intended as educational material. Although best efforts are made to ensure all information is accurate and up to date, occasionally unintended errors and misprints may occur. All opinions expressed in the above article are those of the author and it is important that you do your own analysis before making any investments based on your own personal circumstances.