Dogecoin’s unlikely rise from meme to $53bn asset

20 Apr 2021482 Views

Image: © Nikolay/Stock.adobe.com

Fans of the cryptocurrency are promoting today as Doge Day to encourage more trading of the asset and to push its market cap even higher.

Today is supposed to be a big day for Dogecoin, the tongue-in-cheek cryptocurrency that has become a $53bn digital asset.

Dogecoin is a cryptocurrency created by engineers Billy Markus and Jackson Palmer in 2013, largely as a joke based on the Shiba Inu meme.

While it has enjoyed occasional bumps in prices over the last seven years, one Dogecoin has typically been valued at less than a cent. However, it has now become the subject of the latest investor rally.

On Monday (19 April), Dogecoin became the world’s fourth largest cryptocurrency after a rally over the last week.

It’s currently trading at around $0.38. That figure might not seem like much when compared to the frothy numbers of bitcoin, but consider that Dogecoin was trading at $0.005 at the start of January.

Dogecoin now has a market cap – the value of all coins in circulation – of more than $53bn. To put that in context, Twitter’s current market cap is $54bn.

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Today (20 April) proponents of the cryptocurrency are hoping for a surge in price that would see Dogecoin hit $1.

How has this happened? Like many rallies of late, from Redditors pumping GameStop to Elon Musk touting bitcoin, it happened on social media. This time confectionery played a role.

The Twitter account of Slim Jim tweeted about Dogecoin last Wednesday. Snickers followed suit and Milky Way was cheerleading. Why exactly? Who knows.

This slotted into a flurry of social media posts emblazoned with Dogecoin’s mascot, promoting the cryptocurrency ahead of today, which has been dubbed Doge Day.

On the surface, it looks like another meme rally but for people who bought up some Dogecoin for a less than a cent, a windfall could be coming.

Dogecoin has benefitted from the overall spike in mainstream interest in bitcoin, which is still the world’s largest cryptocurrency by a healthy margin. Whether institutional investors and Wall Street suits will take notice of Dogecoin in the same way that bitcoin has caught their eye remains to be seen, though it’s unlikely.

It also speaks to yet another frenzy in retail investing that was typified by the GameStop surge earlier this year. More people are getting involved in investing, whether it’s by using trading apps to bet on blue chip stocks or pumping money into a cryptocurrency based on a dog.

Jonathan Keane is a freelance business and technology journalist based in Dublin

editorial@siliconrepublic.com