Dogecoin, the rising cryptocurrency created as a “joke”, has so far fired 3,000% so far this year.
The price of dogecoin, which began to rise in October last year when the last launch of the bitcoin bull began, added almost 400% this week alone – topping into the top 5 of the cryptocurrency with a market capitalization of around $ 50 billion.
Dogecoin mania has taken over the world this week, but some bullish investors predict that the dogecoin price rally may continue and memecoin has so far managed to keep its huge profits.
Telsa billionaire Elon Musk’s latest dojocoin frenzy has been driven mostly by retailers in hopes of getting rich quick and has sparked warnings that those who jump on the dogecoin gang could burn out. A support based on the California Cryptocurrency Exchange reported that the number of consumers buying dogecoin has doubled in the past week.
“The rise of Dogecoin is a classic example of a larger theory of fools, dogecoin investors are basically betting they can make money by selling to the next person who wants to invest,” said David Kimberly, an analyst at the UK-based app. Freetrade, said in an email comments.
“People buy cryptocurrency not because they think it has any significant value, but because they hope that others will pile up, push the price and then be able to sell out and win quickly. But when everyone does that, the bubble in in the end it has to burst and you will stay short if you don’t get out on time. And it’s almost impossible to say when that will happen. “
Others compare dogecoin to GameStop, a video game retailer that has seen its stock price jump this year as retailers organized through Reddit, Telegram and Discord pile up on stocks in an attempt to raise their price.
“In the same way that GameStop’s madness was portrayed as a Wall Street battle against The Little Guy, dogecoin is portrayed as a battle against established crypto giants like Bitcoin,” said Nigel Green, CEO of deVere Group. .
“We can expect many novice retail investors – who may not have the necessary financial sustainability – to burn into the madness of the dojcoins in the same way they did with GameStop.”
While dogecoin is based on bitcoin’s decentralized blockchain technology, there is little developer activity and a handful of people own most of the dogecoin tokens in circulation.
“It’s very difficult to compare dodgecoin to a similar bitcoin that works with innovative technologies and has a limited supply that gives it a shortage, among other valuable attributes,” Green said.
Last month, data revealed that an anonymous person or group controlled about 28% of all dogecoin tokens.
“It only takes one person to dump all his possessions so that the whole market can be loaded,” Kimberly added.