Although Coinbase Global Inc. captured the headlines with its market debut, the frenzy around digital tokens is taking its craziest turn in the price of a testimonial created as a joke.
According to CoinMarketCap.com, Dogecoin, driven by Elon Musk and Mark Cuban, rallied about 180% on Friday, reaching a market value of more than $ 48 billion. It has now increased 18,000% from a year ago, when it was trading at $ 0.002 and was worth about $ 250 million.
The rise of Doge is part of a rise in altcoins, a term for all digital tokens that have emerged in imitation of Bitcoin. Like most of them, its use case is limited, making it a tool for speculators and causing concern for a bubble to inflate into a crypto world now worth more than $ 2.25 trillion. .
“It simply came to our notice then. We knew something big was happening, many investors were chasing it hard. That caused a bubble, “said Scott Knapp, chief market strategist at CUNA Mutual Group.” For every Amazon.com there were ten animals.com that failed. Dogecoin is the pets.com of the cryptocurrency era. ? ”
Interest in cryptography is growing again after PayPal companies in Square began allowing Bitcoin transactions to their systems and Wall Street companies like Morgan Stanley began providing access to tokens to some of the wealthiest customers. All along, crypto assistants who say blockchain technology will resurrect the financial community have been connecting cryptography, getting rich in the process.
The Shiba-Inu-themed Dogecoin was created as a joke by software engineers Billy Markus and Jackson Palmer in 2013. Musk sparked a demonstration earlier this year when he posted a photo of a fake “Dogue” magazine with a dog in a red sweater.
But Michael Novogratz, CEO of Galaxy Digital Holdings, doesn’t buy the hype, as Dogecoin “doesn’t really have a purpose.”
“It’s reminiscent of GameStop,” he said in an interview with Bloomberg TV, referring to the meme stock craze that took over the markets in February. “I would be very, very worried if one of my friends invested in Dogecoin at these prices.”
With little backup in the case of buying cryptocurrencies, the likelihood of them being created remains high, leaving novice traders who jumped the hype vulnerable to heavy losses.
“The government has pumped so much monetary and fiscal stimulus into the economy now, even worthless assets are being offered,” said Michael O’Rourke, JonesTrading’s chief market strategist.
However, the popularity of high coins is hard to ignore. Although Bitcoin is worth more than $ 1 trillion, the total market capitalization of the symbolic universe now exceeds $ 2.25 trillion, according to CoinGecko.com, which tracks more than 6,700 coins.
Bitcoin’s dominance in the crypto world has declined 28% since the beginning of the year, according to OKEX Insights analyst Robbie Liu, citing data from Tradingview. The waning influence began to accelerate this month, he said in an email on Friday, and Bitcoin now accounts for less than 54% of cryptocurrency market capitalization, the lowest level in nearly two years.
“As for altcoins, we continue to experience a strong momentum,” Pankaj Balani, CEO of Delta Exchange, a leading cryptocurrency exchange, said Thursday. He noted the recent record of Ether and the increase in activity in decentralized finance or DeFi, adding that “decentralized exchange currencies will be focused in the coming days, as the market has validated Coinbase to a valuation of $ 100 billion. “
Other tokens without unstable foundations also increase. Cardano and Polkadot, both among the top ten cryptocurrencies by market capitalization, have risen this week.
“Polkadot and Cardano have very few ‘users’ currently,” Shashwat Gupta, founder of Altcoinbuzz.io, said in an email on Wednesday, though he added that there is a lot of development built on them.
And it looks like Coinbase CEO Brian Armstrong may have been into something when he said after the post that it marks a “change of legitimacy” for cryptography.
Coinbase’s listing “will ultimately provide more“ use cases ”for cryptocurrencies and should grow the cryptocurrency market,” said Edward Moya, senior market analyst in North America at Oanda Corp.