Once presented as a joke, the Dogecoin cryptocurrency continues on its record-breaking momentum. In 2021 alone, its value increased by almost 14,000%.
Dogecoin has reached a market capitalization of over 65 billion euros. Since January 1, 2021, its price has increased by around 14,000%. This means that the virtual payment method, which was once touted as a bitcoin parody, leaves behind well-known competitors such as Ripple’s XRP token and ranks 4th among the world’s most valuable cryptocurrencies.
Only Binance Coin with 82 billion euros, Ethereum with 336 billion euros and Bitcoin with 897 billion euros currently have a higher market capitalization (May 6, 2021). As it stands, the virtual coin with the dog in its logo is more valuable than various well-known companies such as US automaker General Motors, video game developer and publisher Activision Blizzard, or pharmaceutical company Moderna.
The value of a Dogecoin is currently around 0.50 euro. As of December 2020, a unit of digital currency cost 0.002 Euro. The rally was sparked, among others, by several tweets from celebrities such as Tesla CEO Elon Musk and rapper Snoop Dogg, who had spoken favorably about the fun currency on social media in January and February, thus indirectly making it the promotion.
In the weeks that followed, the phenomenon developed a momentum of its own, driving the price higher and higher for no apparent reason. This has been supported by the general hype around cryptocurrencies, which has gained further momentum since the Coinbase trading platform went public in April 2021. More recently, the call for a joke for a Global Doge Day has attracted more attention.
Elon Musk has denied an appearance on the US television show Saturday Night Live on May 8, 2021. He announced it on Twitter with the words “The Dogefather.” Experts speculate that this hint will further increase the price of Dogecoin as Musk could comment on the currency during the show and spark further euphoria.
Critics warn against investing in Dogecoin for several reasons. On the one hand, the current price explosion is based on the hype that could go away sooner or later as quickly as it happened. On the other hand, Dogecoin is subject to uncontrolled inflation. While Bitcoin is limited to 21 million units, there is no limit to the production of Dogecoin. There are currently around 129 billion units in circulation, with five billion more being added each year.
Dogecoin was programmed in 2013 by US-based Billy Markus and Jackson Palmer to poke fun at the then-booming hype surrounding bitcoin. The currency was designed as a joke intended to highlight the nonsense and lack of value of cryptocurrencies. Inventors were over their heads with this joke years ago. By his own admission, Markus has not owned Dogecoins since 2015 and has described the current price trend as madness in interviews. Palmer also donated his copies to charity some time ago.
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