The cryptocurrency that began as a joke has skyrocketed in value due to memes, the promise of a big win.
After rallying more than 6,000 percent this year, it remains essentially a joke — albeit one with a potentially darker punchline. There is no rationale for it to be beneficial. Dogecoin appears to have little commercial or investment intent other than facilitating speculative mania and the pursuit of profit. I assume that a large part of its appeal stems from the fact that it is incredibly inexpensive to buy and sell, compared to $60,000 for Bitcoin, making it much more approachable to a retail trader looking for a flutter.
The low nominal price is irrelevant — whether you invest $1,000 in a fraction of a Bitcoin or 3,333 Dogecoins, your risk is the same. However, as with penny stocks, the lower per-coin price is almost certainly psychologically appealing.
Particularly when so many people seem to be into Doge as much for the memes as for the money. Investors purchase Dogecoin to partake in a self-deprecating joke about their failure to invest prudently, which continues to grow in popularity as the price of an individual Dogecoin appreciates.
Doge Barking at the Moon — Elon Musk
What is a Dogecoin exactly? As with Bitcoin, it is a digital currency whose value is determined by how many other users are willing to pay or exchange it. Any other asset or company does not collateralize it, and it will never generate revenue. On the other hand, it lacks the primary characteristic of Bitcoin that attracts crypto enthusiasts: a finite supply. There is no hard limit on the collection of coins created using the Dogecoin programming code.
What it does have is an attractive logo inspired by the “Doge” meme — a Shiba Inu with a look somewhere between silly and knowing on its face. Even the cryptocurrency’s developers describe it as a joke. Dogecoin and its culture take pride in being friendly, enjoyable, and joyful. It was not created with any purpose, as shown by the fact that neither myself nor my co-founder benefited financially from its creation than other coins.
Additionally, Dogecoin has some history — it is a relatively young cryptocurrency. Tokens with a long track record will profit from increased visibility and an ever-growing pool of willing promoters. Dogecoin was there waiting to be discovered by retail investors as interest in cryptocurrency and trading, in general, grew this year.
The coin received a significant boost on April 20, also known as 4/20, a day commonly associated with marijuana. Dogecoin users chose to commemorate #DogeDay by increasing the price to 42, or 69 — another, uh, joke number — or even $1. They were partially successful, as the price rocketed to a record 41.9 on that day, according to CoinGecko.com. It is now down 21% from that high.
Dogecoin has also attracted celebrity billionaires, most notably Elon Musk, co-founder of Tesla Inc., and Mark Cuban, owner of the Dallas Mavericks. That is one use for Dogecoin, by the way: it can be used to purchase Mavericks merchandise. Musk shared a photo of himself carrying a Shiba Inu Lion King-style, as well as a mock-up cover of a fictional Dogue magazine. Users on Reddit and Twitter aided in the meme’s spread with photos such as “Elon Holding Doge High up in His Arms” and the Shiba Inu becoming increasingly buffed up.
The benevolent view of all of this is that it’s just for entertainment purposes. The Doge moment parallels the growth of non-fungible tokens used to validate ownership in digital media. Dogecoin could seem to be a collaborative art project into which you can invest as little as $20 instead of the millions of dollars others have invested in NFTs. Dogecoin is meaningless in the conventional sense, but as everybody knows, meaning is subjective. And there is an investor tribe, many of whom are millennials, who see it as a cause, a campaign.
However, Dogecoin’s rally appears to be a pump: an attempt by some Internet-savvy users to inflate the price by concentrating on a cheap commodity and encouraging one another to purchase. The trick is to exit with a pump before the meme dies, leaving behind newcomers who took things too seriously or sold too slowly. Since the ownership of Dogecoin appears to be concentrated in a small number of anonymous hands, it does not take much to compel the price.
The strange thing is that Dogecoin could be entertaining and a pump, with at least some buyers believing they are in on the joke. Cryptocurrency has shallow entry barriers; Dogecoin is available with the click of a button on many common zero-commission brokerage apps. You may lose your shirt, but there is no need to wager that much money. Cuban discussed Dogecoin on the Ellen Degeneres Show on April 27. He said that he enticed his 11-year-old with a $30 investment. “It is not always the best investment,” Cuban added. “However, you can purchase it on Robinhood, and both signing up and trading on Robinhood are completely free. Therefore, that is one thing.” Cuban continued, “It beats a lottery ticket.”
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Source: https://medium.com/illumination/dogecoin-is-difficult-to-take-seriously-but-the-doge-is-proving-skeptics-wrong-9280241a7975?source=rss——-8—————–cryptocurrency
