Dogecoin, the growing cryptocurrency created as a “joke”, has shot up 3000% so far this year.
The price of dogecoin, which began to rise in October last year as the last bitcoin bitcoin race began, has risen nearly 400% this week alone, entering the cryptocurrency between the top five and their market capitalization reaches $ 50 billion.
Dogecoin mania has taken the world by storm this week, but some bullish investors predict that the rise in the price of dogecoin could continue and memecoin so far manages to maintain its huge gains.
Dogecoin, the cryptocurrency created as a “joke,” has skyrocketed like never before … [+]
STRF / STAR MAX / IPx
The latest dogecoin frenzy, spurred on by Telsa billionaire Elon Musk, has been driven largely by retailers hoping to get rich quick and has sparked warnings to those jumping on the dogecoin cart. Uphold, a California-based cryptocurrency exchange, reported that the number of users buying dogecoin doubled last week.
“The rise of Dogecoin is a classic example of the theory of the biggest fools, basically dogecoin investors bet that they will be able to charge by selling to the next person who wants to invest,” said David Kimberley, analyst of the trade application with UK-based Freetrade said in emailed comments.
“People buy cryptocurrency, not because they think it has any significant value, but because they expect others to accumulate, raise the price and then be able to sell and earn quickly. But when everyone does, the bubble must finally it will explode and you will be changed if you do not leave in time. And it is almost impossible to say when this will happen. “
Others have compared dogecoin to GameStop, the video game retailer that has seen its stock price soar this year, as retailers organized through Reddit, Telegram and Discord pile on stocks to try to raise their price .
“Just as the GameStop frenzy was presented as a Wall Street battle game against The Little Guy, dogecoin is presented as a battle game against established crypto giants like bitcoin,” said Nigel Green, the chief executive of deVere Group said in comments sent by email.
“We can expect many novice retail investors (who may not have the necessary financial recovery capacity) to burn into the dogecoin frenzy in the same way they did with GameStop.”
The price of dogecoin has risen almost 400% this week alone and now hovers around 30 cents … [+]
Coinbase
Although dogecoin is based on Bitcoin’s decentralized blockchain technology, there is little developer activity and a handful of people own the vast majority of dogecoin tokens in circulation.
“It is very difficult to compare dogecoin with bitcoins similar to bitcoin, which runs on innovative technology and has a limited supply that gives it scarcity value, among other valuable attributes,” Green said.
Last month, data revealed that an anonymous person or group controls about 28% of all dogecoin tokens.
“It only takes one person to dump all their holdings so the whole market can close,” Kimberley added.