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Dogecoin: All you need to know about the cryptocurrency based on a meme

As of May 7, dogecoin was up more than 26,000% in the last six months, outpacing percentage gains of other cryptocurrencies like Bitcoin and Ethereum.

With its ever-growing rise in popularity, including a mention from billionaire Elon Musk on the hit American TV show Saturday Night Live, Dogecoin has exploded into the culture. The meme-based cryptocurrency started out in 2013 as a joke. However, it has since established itself as a popular cryptocurrency, soaring to an all-time high last week. As of May 7, dogecoin was up more than 26,000% in the last six months, outpacing percentage gains of other cryptocurrencies like Bitcoin and Ethereum.

In 2013, software engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency as a way to make fun of bitcoin and the many other cryptocurrencies boasting grand plans to take over the world. They called it dogecoin – pronounced “doje coin” with a soft “g” sound – after the popular “doge” shiba inu meme.

According to researchers, the appeal of Dogecoin lies in its honesty. “The appeal of dogecoin has always been its honesty,” researchers explained in a note to clients dated May 4. “Unlike many other cryptocurrency projects…there’s no grand vision, no pronouncements about how dogecoin will change the world.”

Additionally, while bitcoin has a capped supply of 21 million coins, there is no limit to the number of dogecoins that can be created. 

“One of the value propositions of bitcoin is digital scarcity; that there will only be 21 million,” said Mati Greenspan, portfolio manager and founder of Quantum Economics. “There is no such hard cap [with dogecoin], and it has a really crazy inflation schedule.”

Celebrity endorsements of Dogecoin

Tesla owner and billionaire Elon Musk has been talking about Dogecoin since at least 2019, describing the cryptocurrency as his “fav cryptocurrency” and calling it “pretty cool”. However, he is not the only celebrity to push the animal-branded token. NBA team Dallas Mavericks owner and billionaire Mark Cuban has come out in support of Dogecoin. On April 26, Cuban announced that his basketball team was on track to complete more than 6,000 dogecoin transactions by the end of April.

“Doge is the one coin that people actually use for transactions,” Cuban said when asked by a user why he was backing dogecoin. “People spend their Doge and that means more businesses will start taking it.”

Celebrities like Snoop Dogg and musician Gene Simmons have all publicly rallied behind dogecoin. However, there is more to Dogecoin’s incredible rally and record-breaking surge. There is an enduring anti-establishment sentiment after the economic devastation caused by the COVID-19 lockdowns, which is luring investors to invest in Dogecoin.

“Dogecoin is like this kind of big F-U to the system,” said Avi Felman, Head of Trading at BlockTower Capital. “It’s like, ‘Yeah, this thing can have value, too. And I’m just going to buy it because I’m going to buy it.’”

“Elon is basically pushing up this message of, ‘Why can’t dogecoin have value?’” said Felman. “It’s part of the GameStop boom. People like these narratives. They like these stories. They like these jokes. And dogecoin just captured the mind and imagination of every single retail investor.”

The latest with Dogecoin

Dogecoin investors were in for a wild ride this weekend. The cryptocurrency hit its record-high ahead of Elon Musk’s Saturday Night Live appearance. However, the value of Dogecoin took a sharp downward turn after Musk called it “hustle” during his appearance on Saturday Night Live.

Dogecoin was quoted as low as $0.47 on crypto exchange Binance, down 28% from levels around $0.65 before the show. However, after the show, Elon Musk announced that his rocket company SpaceX will now accept the meme-inspired cryptocurrency dogecoin as payment.

Musk tweeted that “SpaceX launching satellite Doge-1 to the moon next year Mission paid for in Doge 1st crypto in space 1st meme in space”.

“This mission will demonstrate the application of cryptocurrency beyond Earth orbit and set the foundation for interplanetary commerce”, said SpaceX Vice President of Commercial Sales Tom Ochinero in the statement released by Geometric Energy.

On crypto data tracker CoinGecko.com, dogecoin jumped more than 800% over the last month and is now the fourth-largest digital currency, with a market capitalization of $73 billion. It hit a record high Thursday last week above $0.73.

“I basically started trading Dogecoin cause it was trending, but now I find it useful to keep small amounts in case I need the USDT [another cryptocurrency] equivalent to make up when I’m buying bigger assets. For example, if there’s a deficiency of 2 or 3 USDT, I can’t buy because of the minimum limits on online crypto exchanges.”, a small scale Indian cryptocurrency investor told OpIndia.

Dogecoin is a volatile cryptocurrency, and investing in it comes with risks, therefore investor discretion is advised. Novice crypto investors can also be scammed online in lieu of a promise to double or triple their money in a short span of time. Exercise caution and invest wisely.

Ayodhra Ram Mandir special coverage by OpIndia

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