Is Dogecoin dead? Elon Musk and Mark Kuban say “So much no”
When Dogecoin enthusiasts (CCC: DOGE-USD) created #DogeDay, many hoped that Dogecoin prices would reach $ 1. Even fifty cents would be acceptable. Source: Shutterstock Instead, April 20 marked one of Dogecoin’s worst recorded days. Within hours, the coin was open from about 40 cents to nearly 32 cents. By the end of the week, the meme coin had sunk below 20 cents, wiping out $ 25 billion in investment wealth. “There was concern among larger investors, who were in big positions, that the dog was approaching its day and wanted to get out,”
; said Eric Schiffer, head of a private investment company called The Patriarch Organization. Tips For all intents and purposes, Dogecoin appeared to be dead. But the inertial bulls would dare the latter. As celebrities such as Mark Kuban and Elon Musk began writing about the cryptocurrency, investors began buying back. Almost magically, Dogecoin prices began to rise again. 10 of the best shares of Nasdaq Blue-Chip to buy now, as investors try to think of an asset with “zero intrinsic value”, inertial investors will continue to confuse the traditional ones. As this week showed, Dogecoin may be dead – but not quite yet. Dogecoin prices: The world’s biggest domestic cryptocurrency joke with $ 40 billion has long confused conventional investors. All coins now have zero intrinsic value, and Dogecoin has made a point of satirizing this fact. Its original code from 2013 dispenses up to one billion coins per solved block, which makes DOGE practically unusable as a form of currency. Fast forward to 2021, however, and DOGE emerged as one of the most serious winners of the year. The $ 10,000 invested in Dogecoin at the beginning of the year would turn into more than $ 870,000 at its peak. Ordinary retail investors became millionaires overnight. Technologically, Dogecoin has also grown. Its ridiculous extraction reward system now works on a system that mimics 2.5% inflation. The ability of “combined mining” also allows miners to process DOGE in parallel with Litecoin (CCC: LTE-USD), significantly increasing their extraction pool. Still, Dogecoin prices seem to have a life of their own. Its major technological repairs in 2014 coincided with a huge drop in value. Three years later it was just the opposite; although development virtually stopped in the first quarter of 2017, Dogecoin prices will rise by 3700% by the end of the same year. The explanation for these movements ranges from a failed Reddit investment scheme to a broader cryptocurrency craze. Recently, DOGE’s price movements have become increasingly strange. On January 28, Tesla CEO (NASDAQ: TSLA) Elon Musk posted on Twitter the first of many posts to mention Dogecoin, a photoshopped issue of Dogue magazine with Cinza the Whippet on the cover. DOGE prices jumped 500% by the next day, creating a pattern of price increases after each mention by the new Tweeter-in-Chief. Source: Thompson Reuters Dogecoin prices after Elon Musk’s tweet Since then, other celebrities have jumped on board. In February, billionaire Mark Kuban told Forbes that he had bought Dogecoin for his son. “It’s fun, exciting and educational for him,” Kuban said during the interview. “This gives you a better chance of winning the lottery ticket.” This educational lesson may have earned billions for investors. By mid-April, Dogecoin prices had risen so high that it briefly replaced the XRP (CCC: XRP-USD) as the world’s fourth-largest currency. Dogecoin Drives When cryptocurrencies took off in the early 2010s, Bitcoin (CCC: BTC-USD) dominated. Creating new portfolios was a cumbersome process, and few investors dared to go beyond what they already knew. As such, Bitcoin held at least 95% market dominance until 2016. As high-quality exchanges began to emerge, Bitcoin’s early lead became less critical. Newer exchanges have allowed customers to buy dozens of different coins without creating a new wallet for each currency. Technological barriers to new altcoins have begun to crumble. In her place, the power of celebrity began to take over. Coins such as Cardano (CCC: ADA-USD), Polkadot (CCC: DOT-USD) and Stellar (CCC: XLM-USD) soon climbed into cryptocurrencies thanks to their stellar development teams. In some cases, technology didn’t even seem to matter. In March, Tron CEO (CCC: TRON-USD) Justin Sun made headlines after losing a $ 69 million auction for NFT’s most expensive work of art (irreplaceable token) to date. The currency of the well-known “superman of the century” will last almost four times until mid-April, despite serious problems with Tron’s plagiarism (the Sun will continue to blame this for the poor “translation”). Today, these same celebrities are already raising Dogecoin prices higher. It doesn’t seem to matter that Dogecoin has virtually no development team, nor that its technology is virtually identical to that of Litecoin. As higher profile names jump on board, the price of cryptocurrency seems to be going in only one direction: up. The impetus became the driving force behind Dogecoin’s “celebrity effect” also coincided with a broader shift towards inertial investment, a by-product of the role of social media in promoting cryptocurrencies. Many coins already have special fan bases that inadvertently create feedback cycles in the price of the coin. Rising prices are attracting more interest on social media, leading more buyers to join and so on. The results were nothing short of breathtaking. An investor who bought one of the 10 most mentioned new coins on Twitter in mid-2020 could see that their investment tripled the return on bitcoin. (Only one of these typically risky initial coin offerings, or ICOs, will sink from its original price.) Rising inertial investment has even found inexperienced crypto investors with experience. In May 2020, California-based Cryptolab Capital closed its doors after a series of bad Bitcoin returns. Companies like Virgil Capital would resort to fraud to maintain the illusion of success. The impulse, however, is a double-edged sword. The same “hot money” investors are often the first to sell, creating an inexorable downward spiral. That’s why the 50% drop in Dogecoin last week is a concern for investors. Without intervention, the coin was certainly set to fall further. Elon Musk to the rescue Fortunately for Dogecoin holders, however, supporters of the coin had other plans. As Elon Musk and fellow celebrities turned to social media for support, DOGE prices began to rise. By the time Musk tweeted The Dogefather at 2:20 a.m. on April 28, prices would have reached 32 cents the next morning. For Dogecoin, these refunds matter. Most cryptocurrency investors in the late game are “buyers who want to make money,” said Richard Partington, an economic correspondent at The Guardian. Falling prices usually trigger more sales. The volume of trade makes the case. DOGE’s initial run of up to 40 cents coincided with a wave of purchases. As prices fell, volumes remained higher. In other words, investors were selling faster than new buyers were entering. Chartists often disappoint major stock pickers with terms such as “breakthroughs” to describe the initial rise in prices, leading to a further rise (or vice versa to the shortfall). In the case of Dogecoin, they have a point – a small push from a well-written tweet can become a catalyst for sending DOGE to the moon. So, with Dogecoin, invest carefully. It is no longer the investors who control the rocket ship; famous supporters support the currency of this strange new world. As of the date of publication, Tom Yong did not have (either directly or indirectly) positions in the securities mentioned in this article. Tom Yong, CFA, is a registered investment advisor with a mission to bring simplicity to the world of investment. More from InvestorPlace Why everyone invests in 5G All WRONG It doesn’t matter if you have $ 500 savings or $ 5 million. Do this now. Top Stock Picker reveals its next potential 500% Winner Stock Prodigy, which found a NIO of $ 2 … Says Buy This Now Post Dogecoin Dead? Elon Musk and Mark Kuban say “So much not” appeared for the first time in InvestorPlace.