The Rise of Dogecoin
At first glance, Dogecoin looks like a quirky free spins token at online gaming sites, like SlotXO. The coin’s design features an internet meme rather than a slick logo, and the branding is all about fun.
Don’t be fooled, however. In the first half of 2021, the company’s market cap surged to $84 billion. For a payment system initially created as a joke, Dogecoin is now attracting some serious market attention.
Let’s delve into how it climbed to top dog in the world of emerging altcoins.
What is Dogecoin?
Dogecoin is a cryptocurrency payment system using a blockchain-based approach. It is similar in its development to that of Bitcoin but lacks the intrigue accompanying Bitcoin’s mystery creator.
The Creation of Dogecoin
In 2013, Jackson Palmer and Billy Markus decided to make fun of the frenzy surrounding altcoins. Bitcoin paved the way for big returns in the cryptocurrency sphere, and many developers wanted to emulate its success. However, Palmer and Markus developed their system as a satirical take on the nonsensical market conditions at the time.
The two entrepreneurs centred their coin’s appearance on a popular dog meme that featured grammatically incorrect English. It was a parody coin, but its rise in 2021 seems to indicate that the joke is on Dogecoin’s creators. Since then, the skyrocketing demand for this cryptocurrency has raised its market cap by over 14,000%.
What is Behind the Rise?
The COVID-19 pandemic’s effect on the economy might have been a trigger point for Dogecoin. Traditional stock and share market values dived as investors looked for alternative investment options and cryptocurrencies soared. Bitcoin was one of those that rose to record levels as markets adjusted, but the effect of its success was that smaller investors could no longer afford it.
Many investors began to look at cheaply-priced altcoins instead, including Dogecoin. The coin’s value reached frenzied levels thanks to the endorsement of Elon Musk and other celebrities. Some investor groups even began to refer to Dogecoin as the next “GameStop” event—a reference to the saga that proved that the ‘little guy’ has purchasing power, too.
For GameStop, Wall Street traders shorted the stock, while small investor groups simultaneously took advantage of the lower price. It rapidly pushed up the value of GameStop’s trades and forced Wall Street players to repurchase the shares at an inflated rate.
Another trigger was the stimulus checks that the U.S government issued. It increased the disposable income for many Americans, making an unplanned investment in a small cryptocurrency like Dogecoin more attractive.
Will Dogecoin Crash?
Yes, the fall is inevitable. If you look at the history of Bitcoin, you’ll see why a crash is on the horizon for the speculative coin. The price is market-driven, and when investors lose interest or sell fast, Dogecoin’s value will drop.
Is Dogecoin a Bad Investment?
It’s difficult to say much about Dogecoin’s prospects at the height of its success. There’s no doubt that the current interest in the coin has created a market bubble, but it is not clear whether it will find stability. The novelty of the brand and interest by institutional investors could help it survive.
Why not consider investing in Dogecoin, like a game of chance at SlotXO? Win or lose, the ride will be exciting.