Traders are reaching a “Doge’s Day” rage in online forums to push the price of the meme cryptocurrency to around $ 1, in a further sign of overheating in some parts of the market.
The craze around dogecoin, which started as a joke and was designed to serve no purpose, has caused the price to soar by more than 8,000% this year. In comparison, the S&P 500 generated about 1,900%, including dividends, over the past three decades.
The cryptocurrency traded up to about 43 cents on Monday, after recording a record 45 cents on Friday. He started the year with a value of less than 1 cent.
Users who share memes and tweets on Twitter and Reddit forums are driving the recent race to dogecoin.
Its sharp rise means the market is valuing the cryptocurrency at more than $ 50 billion, or more than Ford Motor Co.
and Marriott International Inc.
If traders achieve their goal of raising the price to $ 1 on Tuesday, it could be worth more than blue tech companies like Advanced Micro Devices Inc.,
CVS Health Corp.
and General Motors Co.
The increase in Dogecoin is accompanied by a broader increase in cryptocurrencies. It has been driven in part by stimulus controls, which added momentum to the so-called rise in financial markets. The list of the Coinbase Global exchange operator Inc.
drew more attention to digital assets and boosted the prices of cryptocurrencies like bitcoin and ether to record highs last week.
Cryptocurrencies are usually volatile, prone to double-digit percent oscillations in a single day. The sharp rise in recent days raises concerns that speculative bets are adding to their volatility. A precipitous drop in the price of dogecoin or bitcoin could cause hedge funds and other large investors to reduce risky stakes and contribute to a wider sale that would lead to new and inexperienced investors.
“A lot of people have come in a long time ago and haven’t seen bitcoins fall,” said Robert Drach, asset manager at Drach Advisors in Tallahassee, Florida. Supervises investments for individual clients.
“[The rise in dogecoin] i feel like a bubble. That always worries me, not just for dogecoin investors, but for regular equity investors, ”Drach said.
On Sunday, Bitcoin fell more than 10% when it was speculated that the Treasury Department was considering taking action against some institutions for money laundering using cryptocurrencies.
Stimulus checks and low borrowing costs that have boosted inventories over the past year have likely also contributed to the increase in the dogecoin, Drach said.
“I don’t think he can sit there and make a lot of money with his S&P 500 ETF and then look at dogecoin people and laugh, because it’s the same liquidity as pumping.” He said.
Marketers said they started promoting Tuesday as “Doge Day” after seeing a new Twitter advertising campaign for Conagra Brands Inc
Slim Jim account. The snack food brand, which often uses memes to draw attention online, said it planned to launch something called DogeSlimJim on Tuesday and urged “DogeArmy” to spread the word. His story was littered with memes from dog Shiba Inu that inspired the creation of dogecoin.
Conie spokeswoman Lanie Friedman said the brand planned to launch a doge-inspired digital product. He declined to provide further details and said Slim Jim’s campaign had nothing to do with the value of the dogecoin.
Shaun Becker, who lives in Phoenix, began promoting “Doge Day” on his Twitter account after seeing Slim Jim’s tweets. The 36-year-old risk and compliance analyst said she bought dogecoin for the first time on Feb. 8, as celebrities like Tesla chief executive Elon Musk and rapper Snoop Dogg promoted it. Mr. Becker’s $ 1,179.42 investment in dogecoin was worth $ 4,477 on Monday, when dogecoin traded close to 39 cents.
“I’m pretty sure Tuesday will probably reach at least $ 1,” Becker said in an interview. “Even if you earn $ 100, you can double your money. I don’t want anyone to make a risky investment. I just want everyone to get a piece of the pie. “
Following the tweets from Elon Musk and Snoop Dogg, dogecoin surpassed $ 10 billion in market value. WSJ looks at why online investors invest money in virtual currency. (Video of 21/02/21)
Last week, newcomers were stacked with dogecoin to such an extent that marketers of the popular Robinhood Markets Inc. app. they had trouble executing operations. Between Thursday and Friday, Payward Inc.’s Kraken exchange recorded dogecoin volumes 71 times the 30-day average.
The recent merger has made dogecoin one of the top five cryptocurrencies for market value.
About 129.2 billion dogecoins were in circulation on Monday, according to CoinDesk. Every day, computers solve mathematical puzzles to unlock new coins. Unlike bitcoin, dogecoin has no limit to the total number of currencies that can exist.
Write to Caitlin Ostroff to [email protected]
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