“Dogecoin”, a cryptocurrency that started out as a joke, reached a total market value of over 40 billion dollars, of which 20 billion were added in 24 hours, CNBC writes.
The cryptocurrency was inspired by the “Doge” meme of the Shiba Inu dog breed and was created in 2013 by software engineers Billy Markus and Jackson Palmer as a faster but also more fun alternative to the bitcoin.
Defying all forecasts, the cryptocurrency had a market capitalization of 40 billion dollars on Friday and reached yesterday reached a value of 32 cents, double that of the previous day.
On Saturday at around 2 pm, Dogecoin was trading at about $0.298 cents.
‘I just became a Dogecoin millionaire’
This is not the first time that the price of this cryptocurrency has spiked. Like many other cryptocurrencies, the dogecoin price started to increase in 2018, following the market trend. It has since disappeared from the radars. But earlier this year, the stock price rose sharply, backed by the enthusiasm of a Reddit group called SatoshiStreetBets.
Like the WallStreetBets group, which supported the advancement of the shares of GameStop in early 2021, SatoshiStreetBets aims to support the price of cryptocurrencies.
On Friday, a Reddit user posted a picture of his stock of dogecoin cryptocurrencies on his Robinhood app.
“Hey, I just became a Dogecoin millionaire,” he said, as his account indicated $ 1,081,441.29.
Why Dogecoin is growing
One of the reasons is the listing of the Coinbase cryptocurrency trading platform. Listed on the US stock exchange on Wednesday, the platform briefly reached a capitalization of 100 billion dollars.
After this event, bitcoin reached a record price of $ 64,000 on Thursday, while Ethereum reached for the first time the price of $ 2,500 on Friday morning.
Some analysts attribute the evolution of Dogecoin to the support that came from Tesla founder Elon Musk, who posted several tweets in support of the coin.
Doge Barking at the Moon pic.twitter.com/QFB81D7zOL
— Elon Musk (@elonmusk) April 15, 2021
However, these posts are of concern to some investors, who accuse him of his ability to manipulate markets. Nic Carter, the co-founder of Castle Island Ventures, warned investors that “they are going to lose money on dogecoin,” which he calls a “vehicle for speculation.”
“People buy cryptocurrencies not because they consider them valuable, but because they hope that others will buy, the price will rise and they will quickly collect a large amount when they sell,” says David Kimberley, an analyst at Freetrade Investment Application.
Kimberley warns that “when everyone does that, the bubble will eventually burst and you’ll run out of money if you don’t get out on time. And it’s almost impossible to say when that will happen.”