02 Mar 2021 Simon Briggs
Brief History Of Dogecoin And Why It Surged During The Last Month
2013’s meme is 2021’s most hyped cryptocurrency. What started as a joke not only became a legit coin but managed to stay around for years, and it’s now making headlines after Elon Musk, and other billionaires tweeted about it. At the beginning of February, Dogecoin (CCC: DOGE-USD) grew by 37%, and intraday trading volume peaked at $16.9 million.
But what exactly is Dogecoin, how did an elaborate joke manage to become one of the most talked-about cryptocurrencies, and should you buy it?
A brief history of Dogecoin
Whether or not you’re into memes, you probably remember a Shiba Inu called “Doge,” which was huge on the Internet around 2013. Well, the same Doge gives Dogecoin its name and logo. The crypto was created as a joke by two software engineers: Billy Markus from IBM and Jackson Palmer from Adobe. On December 6, 2013, they launched a website for Dogecoin, and they later said that they wanted to create a cryptocurrency as ridiculous as possible that could appeal to a broader audience than Bitcoin. Within one month after being launched, Dogecoin.com gained one million visitors, and Dogecoin quickly became the Internet’s currency – a currency with a fun, friendly community made out mostly of meme lovers.
That same year, Dogecoin was the only cryptocurrency that rose in value by 300% when Bitcoin and other cryptocurrencies dropped after China forbade local banks from investing in Bitcoin. Although it started as a joke, Dogecoin stuck around, and, over the years, the community was involved in many fundraising events. Although the price of one Dogecoin never exceeded $1, its US market cap exceeded $5.3 billion in January 2021, and it looks like it’s not going anywhere.
Several exchanges even offer DOGE/BTC exchanges, and you can trade USD/DOGE currency pairs.
For veteran investors, the very existence of Dogecoin may seem like a joke that’s gone too far, but it goes to show just how much power Internet culture has and how memes can move markets. In the same way that GameStop’s stock experienced skyrocketing growth in January after a subreddit talked about it, Dogecoin also made waves on the Internet once again after Elon Musk tweeted about it.
Fate loves irony – how a random tweet drove the Dogecoin price up by 800%
Elon Musk has a history of posting memes on Twitter, but when he jokingly posted a tweet saying “No highs, no lows, only Doge,” he got more than likes and retweets. Dogecoin rose by a whopping 800% in less than 24 hours, and other pop culture icons, like Snoop Dogg and Gene Simmons, also tweeted about Doge, fueling the hype.
Soon after posting the tweet, Musk went on social media chat site clubhouse and shared his thoughts on cryptocurrencies. He explained that, while he does not actually hold any Dogecoin, he owns Bitcoin and believes in its potential. Later, he returned with several other tweets about Dogecoin, saying that it’s “the people’s crypto” and that he even bought some for his son. The entire sequence of events was quite similar to what happened in 2017 when many celebrities hyped Bitcoin on social media and Bitcoin’s price rose to $20,000. More recently, a Reddit group called SatoshiStreetBets drove the enthusiasm for Dogecoin even further, just how the WallStreetBets hyped GameStop stocks.
No one can say for sure if the hype will last, but the reality is that the Dogecoin price is higher than it’s ever been and that it’s clearer than ever that Internet culture influences the moves of the market. It goes to show that even something ridiculous, started as a joke, can draw attention and compete with fiat currencies. As Elon Musk put it, “fate loves irony,” and even if the creators of Dogecoin never intended for the crypto to be this big, sometimes things can take a life of their own on the Internet.
Is Dogecoin worth buying?
Even if the creators of Dogecoin didn’t expect the cryptocurrency to make it this far, everyone’s talking about it, and not just in the US. For example, if you look at Forex brokers in St. Vincent & the Grenadines, you might see DOGE/USD or DOGE/EUR as one of the accepted currency pairs.
But does that mean that you should buy Dogecoin or include it in your investment strategy? Well, that depends. There’s no doubt that Dogecoin is a tempting cryptocurrency, and with all the hype around it, it’s no wonder it’s so tempting. Plus, it’s really inexpensive and, who knows, maybe it will one day reach Bitcoin’s value, and you’d be getting it while it’s still cheap.
However, things are not that simple. First of all, no one really understands what this rally is all about – except, perhaps, an appetite for alternative coins and a desire to protect oneself from the economic impact of the pandemic. Also, unlike Bitcoin, Dogecoin does not have a built-in limit, so it will never run out, as Bitcoin is expected to, and soon.
And secondly, Dogecoin, like all other cryptos, is extremely volatile, and after the current hype dies off, it could sink to a record low, so you have to be careful because it’s a speculative market.
Still, there’s another way you can make sure of Dogecoin without risking anything: by using it to learn about cryptocurrency trading. On February 8, he addressed the matter on Twitter, explaining how he uses Dogecoin to explain price movements and the economics of supply and demand to his son. Since Dogecoin is less than $1, it’s perhaps the most inexpensive way of getting into crypto and observing how prices fluctuate. Since you didn’t pay a lot of money for it, you can have fun watching what happens to it and see if crypto assets are right for you. If you are a veteran investor who’s on the fence about crypto to begin with, Dogecoin may not be for you, but if you’re thinking of getting into crypto without risking a lot of money, you might consider giving it a go, as long as you understand the risks.
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