5min read
Published on: Mar 21, 2024
#Crypto 360
#Blockchain
The ongoing bull run of the crypto market has sparked a memecoin rally too. Among the memecoins, Dogecoin (DOGE) is leading the charge in recent months as ever.
Dogecoin’s price has surged over 200% since the beginning of the year, trading at $0.13 at press time.
A favourite of crypto enthusiasts, DOGE gained immense popularity in the wider financial world in the wake of its embrace by leading business tycoon Elon Musk.
Today, we will have a look at Dogecoin's role as the leader of memecoins and its significance in the wider crypto economy.
At first, it is important that we understand what a memecoin is.
When the cryptocurrency economy debuted, it projected its financial model as a rebellion against the centralised order of traditional finance (TradFi).
It was a lofty goal and much ridiculed. Memecoins owe their existence to this sentiment only.
They were created to mock and ridicule the burgeoning crypto economy.
Unlike conventional cryptocurrencies, memecoins often lack a concrete use case, instead riding on the waves of social media trends and community hype.
In contrast to the more established cryptocurrencies which see a cyclical pattern, memecoins are cheap, highly volatile and risky.
Investors are drawn to memecoins because they have a potential to yield quick returns.
Memecoins are usually created by online communities for entertainment. Their prices fluctuate as per the whims of online communities.
Deeply intertwined with internet culture, memecoins draw upon trending memes for branding and community building.
The high-risk, high-reward model of memecoins attracts investors eager to capture the skyrocketing gains they offer.
The way Deadpool is a spoof of Superheroes, Dogecoin is a spoof of Bitcoin (BTC).
Today, DOGE is the most popular memecoin.
Launched in December 2013, Dogecoin was created by Billy Markus and Jackson Palmer, two software engineers.
DOGE is a memecoin that began as a mockery of the general hype surrounding Bitcoin in the global financial markets.
DOGE’s protocol is based on the proof-of-work (PoW) consensus mechanism, similar to that of BTC.
It quickly became popular on online social media platforms. Its low price quickly attracted a substantial trading volume.
It even elicited the support of several celebrities as diverse as Elon Musk and Snoop Dog.
However, everything was supposed to be a big joke.
Similar to many other cryptocurrencies, DOGE has been described by some commentators as a form of Ponzi scheme.
Critics allege that DOGE investors who purchased it early on, have a large financial incentive to draw others into purchasing more DOGE.
It will drive DOGE’s price up, therefore benefitting the early investors financially at the direct expense of later purchasers.
DOGE became increasingly popular with time due to its embrace by the popular business tycoon Elon Musk.
The boss of Tesla, SpaceX and X once called Dogecoin his favourite cryptocurrency in 2019.
Musk cheered on the memecoin once again in 2020.
Last year, the tycoon even remarked that he would love it if the next X CEO were a DOGE lover like himself.
In April 2023, Musk replaced X’s logo with Dogecoin’s logo, the Shiba Inu dog.
Note: There is eponymous memecoin too, Shiba Inu (SHIB), which is also extremely popular along with DOGE.
Each time Musk mentioned or referred to DOGE, its price immediately shot up 20%-30%.
Several fintech enthusiasts took it as a sign of the intersection of the worlds of cryptocurrency and social media. They speculated that X might integrate DOGE into its payment system.
But it doesn't seem like a possibility anymore. In fact, Musk clarified in November 2023 that none of his companies will ever create a crypto token.
The relationship between Musk and Dogecoin wasn't without its tense moments.
In June 2022, a group of dissatisfied Dogecoin investors sued Musk for $258 billion. They claimed that he used X and Saturday night live (SNL) platforms to manipulate DOGE’s price.
It further claimed that Musk profited from trading DOGE through wallets controlled by him or Tesla and deliberately inflated its price by over 36,000% within two years before allowing it to crash.
Musk’s lawyers requested the court to dismiss the lawsuit in August 2023 due to its long duration.
The same month, the Wall Street Journal reported that the billionaire secretly funded the development of the Dogecoin project, citing an upcoming biography of the tycoon.
The case is still dragging.
On 27th February, Whale Alert reported two transactions on the Robinhood trading platform.
The first transaction involved 172.89 million DOGE in $16.59 million. The second transaction involved 103.32 million DOGE in $9.87 million.
These whale transactions, coupled with the broader crypto rally riding on Bitcoin’s $70k surge, led to DOGE rising by more than 10% to $0.1 within a day.
Nonetheless, it is nowhere close to the all-time high (ATH) of $0.7376 that it hit in May 2021.
A total of 143.42 billion DOGE tokens are in circulation.
Please note that the memecoin has an unlimited supply.
Today, DOGE is the 9th largest cryptocurrency in terms of market capitalisation ($25 billion).
We recommend BitDelta traders to conduct an independent and thorough research on their own before investing in DOGE.
It is a memecoin without much utility in terms of use cases. Its price movement is instead subject to the online trends and whims of its powerful online community.
In addition, it is a high-risk, high-reward crypto token that makes it popular only among adventurous traders.
However, its price is still very low, and a lot of people don’t mind investing in DOGE for the same reason.
You can trade DOGE along with other leading memecoins such as SHIB, PEPE and MEME on BitDelta with the click of a button.
Register here to start trading on BitDelta.
However, we recommend you keep a close watch on the latest trends in the world of memecoins, and Dogecoin in particular, before making an investment in DOGE.
Only then can you decide to make a prudent investment decision.
Stay tuned in to the BitDelta Academy to learn about the latest trends in the crypto and stock markets.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
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