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Dogecoin is a cryptocurrency that was initially created as a joke that then blew up on Wall Street. The surge of Dogecoin sent its returns in 2021 to more than 8000%.
Dogecoin initially came from a meme, and it has turned into an asset that is widely traded. It is currently worth more than fifty billion dollars. It is worth more than the Ford motor company and the Marriott international. It is the latest financial alchemy act by investors who move fast who use their access to trading platforms that do not charge any fees and a wave of stimulus money from the government to transform the market over the years.
The rise of Dogecoin cryptocurrency is very similar to GameSpot Corp’s amazing rise during the early parts of the year, which was an episode where traders came together on Reddit as well as other social media platforms. They were able to transform a mall retailer that was already past its prime into a superpower in the stock market.
However, this time, the buyers of Dogecoin went a step further. They turned what was meant to be a quirky joke into a valuable asset which ended up providing incredible gains to the trader who invested in it in the early stages. The latest stage in the frenzy started on Tuesday when forums online declared it to be doge day which was a loosely organized attempt to increase the price of Dogecoin from forty cents on Monday up to one dollar. The cryptocurrency was worth less than a penny back in January.
Both episodes shower the potency and scale of today’s environment for retail trading, where organized efforts of the inline communities can create a shockingly huge impact on the prices in the market. They also reveal the expectations placed on the prices that they will continue to increase, and as such, they can embody the risks that these fortunes could suddenly be wiped out as the winds of the market change.
For now, the increase and decrease of preferred assets in forums online have largely been contained. The GameSpot surge reached its peak back in January, and then it slowly fizzled out without it hitting any of the major indexes. However, there are multiple investors who are keeping their eye on any oddities in the market. The reason that a steep fall in the prices for bitcoin and Dogecoin can make hedge funds and other large investors decrease risky holdings and influence a wider retreat from risk.
Though right now there isn’t a reason to get worried that the stocks are approaching a steep pullback, the rise of dogecoin ” feels like a bubble to me,” stated Mr. Drach,” that has always been very concerning for me and not just for the investors of Dogecoin but also for the investors in regular equities.”
For now, the sharp rise of Dogecoin liberates one of the true but one of the strangest facts of 2021. Some of the most unusual trades can sometimes turn over huge gains. On December 31, if someone invested in $10000 worth of Dogecoin as of Monday, they would have gained more than $800000, according to the data collected by Kraken. If the same amount of money were also invested in GameSpot, they would have amassed more than 80000 dollars and an index that tracks the S&P $500 about $11000, which also includes the dividends.
Should one day dogecoin ends up hitting one dollar, this would mean that its value would surpass the value of blue-chip companies such as General Motors Inc, Advanced Micro Devices, and CVS Health Corp.
“This is absurd,” stated Billy Markus, the co-creator of dogecoin ” I have never seen anything like this. It feels like one of those things that once they start to go up they might continue going up.”
Unlike bitcoin, Dogecoin does not serve any purpose, which means it does not limit the number of Dogecoin that are allowed to exist. Every day, computers around the world attempt to solve mathematical puzzles so that they can be able to unlock new dogecoins. Currently, there are 129.2 billion dogecoins in circulation as of Monday, according to data from CoinDesk.
The rise of Dogecoin has come along with a rise in popularity and interest in cryptocurrencies. When the sentiment from investors, even those outside the world of cryptocurrencies, look to be stretched by some metric. The so-called rally currently presents in the financial markets has raised the prices on various things such from meme stock, for example, GameSpot, to other things like non-fungible tokens that validate the authenticity of sporting highlights and the originality of artworks.
Cryptocurrencies tend to be very volatile and liable to double-digit percentage shifts in one day. Last week Coinbase Global sent the prices of cryptocurrencies as well as other records. On Monday, the price of bitcoin decreased more than 10% based on the speculation the Treasury department was considering taking action against some of the institutions that are using cryptocurrencies for money laundering.
Low borrowing costs and stimulus checks that sent the prices of stocks to soar over the previous year have likely contributed to the rise of Dogecoin.
Some of the traders have begun to promote Dogecoin after seeing a new advertising campaign on Twitter by Slim Jim, which is part of Conagra brands. The snack food company, which regularly uses memes online to draw attention to the brand, stated it had plans to doge slim jim on Tuesday and used the dogearmy to speed the word. Its Twitter account was full of memes that featured the Shiba Inu dog breed, which is the inspiration for the Dogecoin.