Dogecoin Explodes: The Crypto Joke Becomes A Top Dog And Best In Show
Andy Hecht | Apr 29, 2021 07:11AM ET
This article was written exclusively for Investing.com
- Dogecoin started as a joke
- Elon Musk has a particular affinity for DOGE
- Market cap rises over the $40 billion level; that's no joke
- The trend is your friend
- Wild speculation could be the sign of at least a temporary top
The parabolic move in cryptocurrencies continues to take many of the tokens higher. The top two cryptocurrencies, Bitcoin and Ethereum, recently moved to new highs. Bitcoin traded to $65,520 on Apr. 15, and Ethereum reached $2763 per coin on Apr. 28.
At last count, the asset class had a total of 9,478 tokens with a market cap of just under $2.1 trillion. The two leaders hold roughly 64% of the market cap. The other 9,476 tokens have the remaining 36%. Only eight cryptocurrencies have market caps over the $30 billion level.
The seventh is Dogecoin (DOGE), a token that began as a joke. DOGE recently rallied to over 40 cents per token. On Apr. 28, it was at the 32.5 cents level, with its market cap over $42 billion, far from a joke in the asset class.
h2 Dogecoin started as a joke/h2Dogecoin is a cryptocurrency invented by software engineers Billy Markus and Jackson Palmer. The pair created a payment system that is instant, fun, and free from traditional banking fees. A dogecoin features the face of the Shiba Inu dog from the “Doge” meme as its logo and namesake.
Dogecoin burst on the cryptocurrency scene in December 2013 during the peak of the first Bitcoin rally. The founders looked at their invention as a joke, with an idea to create a silly and entertaining crypto token that was inexpensive enough to attract a broad market.
Dogecoin is a slightly tweaked copy of Litecoin, which was tweaked from Bitcoin. The founders launched the coin as a goof on all of the crazy altcoins coming to market.
Each token was then a fraction of a cent. Dogecoin fans, or “shibes” on the Reddit forum, began tipping each other for amusing comments using Dogecoin.
h2 Elon Musk has a particular affinity for DOGE/h2Tesla’s CEO Elon Musk has been a big fan of Dogecoin over the past months. On Apr. 1, he tweeted, “SpaceX is going to put a literal Dogecoin on the literal moon.” In February, he tweeted, “Doge” followed by “Dogecoin is the people’s crypto.” Elon Musk’s talent for making nerd engineer the new cool sent Dogecoin prices 50% higher after the tweet.
Musk is not the only high-profile Dogecoin supporter. Not surprisingly, the cryptocurrency caught the attention of rapper Snoop Dogg, who put a “Snoop Doge” Shiba Inu on an album cover. Meanwhile, former KISS bassist Gene Simmons has dubbed himself the “God of Dogecoin.”
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Mark Cuban, the owner of the NBA’s Dallas Mavericks, highlighted Dogecoin on a recent episode of the Ellen DeGeneres show suggesting the team was selling promotional products for payment in Dogecoin.
The altcoin that began as a joke has benefited from a tidal wave of positive public endorsements from celebrities.
h2 Market cap rises over the $40 billion level; that's no joke/h2The top ten cryptocurrencies have market caps over the $18 billion level. The exclusive group represents less than 0.11% of the total number of tokens floating around in cyberspace.
Dogecoin is a member of this esteemed group. As of Apr. 28, it was trading at over 32 cents with a market cap of around the $40 billion level.
Source, all charts:
The chart shows that in November 2020, one Dogecoin was worth below 0.3 cents. The price recently hit a high of over 40 cents.
The shorter-term chart over the past month shows a pattern of higher lows and higher highs in Dogecoin.
h2 The trend is your friend/h2The trend is always your best friend in any market. A celebrity-fueled bull trend in Dogecoin, together with a parabolic trend in the entire cryptocurrency asset class, has been a powerful force.
Elon Musk’s support of Dogecoin may be a bit of a goof, but he has put his money where his mouth is when it comes to his belief in the cryptocurrency asset class. Earlier this year, Tesla (NASDAQ:TSLA), the company that Musk founded and of which he's the CEO, invested $1.5 billion in Bitcoin and began accepting cryptocurrency as payment for its products.
Recently, the electric vehicle manufacturer sold some of its crypto holdings, to boost its profits in Q1 and as a test of the market’s liquidity. I am pretty sure that the world’s second-wealthiest person, with a net worth north of $150 billion, owns quite a few Dogecoins.
h2 Wild speculation could be a sign of at least a temporary top/h2After Bitcoin rose from six cents to over $65,000, market participants are looking for the next token that will lead to incredible wealth. Many of the over 9,400 tokens are lotto tickets that will end up as dust collectors in computer wallets. Still, there is always a chance that some are diamonds in the rough that will deliver incredible, Bitcoin-like returns for crypto investors.
Dogecoin may have started as a joke, but its $40 billion market cap makes it a player in the asset class. Each Dogecoin at 40 cents is worth over six times what a Bitcoin was worth in 2010.
Meanwhile, wild speculation often creates bubbles that eventually pop. We are likely to see wild price volatility in the asset class as there are few if any examples of markets that have delivered cryptocurrency-type returns over our lifetime. However, at the $2 trillion level, the entire asset class’s market cap is still below Apple’s (NASDAQ:AAPL) valuation, leaving lots of room for growth.
Dogecoin is no longer a joke. DOGE’s PR has been the best in the asset class, making it one of the top dogs and the best-in-show in the digital currency world.
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