Dogecoin is a joke cryptocurrency that was briefly worth $54 billion on Tuesday. How did meme-based tokens increase their market value so quickly?
Dogecoin has found a use as a reminder to send interesting or informative social media posts to Reddit users.
It is not to recognize its value. Many people were laughing and putting money behind the joke, while others were betting on the result. In the end, it led to Wednesday’s skyrocketing and plummeting.
Dogecoin’s price quadrupled in two days last week, which undoubtedly indicates a large surplus of the cryptocurrency. However, this does not prove that the costs of stocks or bonds are ridiculously high. There almost always is something surplus since that is how the market works.
Like other cryptocurrencies, Dogecoin is an ideal choice for speculation. It has very little supervision and does not have any basic principles that limit prices and volatility. The gambling instinct can only push stock prices up for so long. It is because, ultimately, the company’s fundamentals will be exposed and provide a basis for valuation.
DogeCoin millionaire: Who’s laughing now?
At 6:00 PM PDT on April 15, Glauber Contessoto became a Dogecoin millionaire.
After learning about the meme cryptocurrency on Reddit, he invested $180,000 in Dogecoin on February 5. At that time, Dogecoin’s price was about 4.5 cents. DOGE has aroused Contessoto’s interest for several reasons.
He likes the Reddit community around digital coins. Since jokes around Dogecoin raised in 2013, the coin’s base has dramatically increased. He also liked it for its inspiration from the Shiba Inu “Doge” meme. Contessoto also was a big fan of Elon Musk. Tesla’s CEO’s Twitter posts increased interest in him regarding the coin.
Experts say that Dogecoin does not have a supply cap like Bitcoin, making it a riskier investment. Nevertheless, Contessoto insisted on its investment plan and then continued to hold the cryptocurrency.
About two months later, on the night of April 15, the Dogecoin price began to soar. That week, DOGE increased by 400%. On April 16, the market value of Dogecoin reached $49 billion, and it eventually reached an all-time high of about 45 cents.
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