This virtual dog is barking.
The crypto known as dogecoin, created back in 2013 as a joke, has been rising to record levels, highlighting a renewed fervor this year for virtual assets that increasingly draw the interest of celebrities, some institutional investors and corporate officials.
On Monday, dogecoin boasted a market value of nearly $10.5 billion, up 107% over the past seven days, according to CoinMarketCap.com, which provides data on digital assets.
That puts the virtual coin — pronounced “dōj-coin” and sharing the doge name with the elected magistrate of such historical city-states as Venice and Genoa but commonly associated with a popular meme featuring a shiba inu dog — in the top 10 among crypto assets, with bitcoin
weighing in at No. 1 at a value of $810 billion.
A single dogecoin was valued at 8.1 cents, up around 30% on Monday; back in late January it was changing hands at less than a penny, costing 0.007 cent as of Jan. 27.
While dogecoin isn’t a virtual asset that is considered to have a utility — a point that could be argued for a number of cryptos — it has been given fresh life after Tesla Inc.
CEO Elon Musk in late December tweeted this simple, cryptic message via Twitter: “One word: Doge.”
Musk’s subsequent bullish tweets about dogecoin appeared to further catalyze a rally in the crypto.
On Sunday, the Tesla and SpaceX leader wrote:
Dogecoin co-founder Billy Markus told the Wall Street Journal in an article at the beginning of February that he created the asset in 2012 as a “lighthearted cryptocurrency,” then known as Bells, to serve as the fun version of bitcoin.
According to the newspaper, fellow dogecoin co-founder Jackson Palmer shared his idea for a cryptocurrency based on the shiba inu meme, and Markus reconfigured his code for Bells to fit the meme.
Markus reportedly told the Journal that dogecoin’s rally to records “doesn’t make sense,” and equated it to the recent fervor on social-media platforms, like Reddit’s WallStreetBets, that helped drive shares of GameStop Corp.
and AMC Entertainment Holdings
to stratospheric heights, until those speculative short-selling-amplified bets cooled considerably.
More recently, however, the likes of rapper Snoop Dogg, whose real name is Calvin Broadus, and Gene Simmons of the rock band Kiss joined Musk — and billionaire investor Mark Cuban — in weighing in on dogecoin.
Simmons referred to himself as the God of Dogecoin, on a Twitter
account associated with him:
Broadus tweeted an image of the shiba inu on Saturday:
So is dogecoin worth all the attention?
Experts in crypto say investors should be operating with more than a modicum of caution.
“These are strange times with elements of ochlocracy manifesting as populism — from the Capitol Hill to GameStop,” Charles Hayter, CEO of London-based research site CryptoCompare, told MarketWatch.
“People are moving markets en masse and are playing greater fool with each other without understanding the ramifications or their own psychological limitations,” the researcher added.
Bullish bitcoin investors make the case that price gains in bitcoin, the world’s No. 1 cryptocurrency, are supported by the limited supply of the crypto that is inherent in its code. Only 21 million bitcoin will ever exist, and so-called mining for bitcoin, or solving complex computational problems that are rewarded by bitcoin, become harder as time goes on. The final cache of bitcoins likely are not going to be mined until around 2140.
The supply of dogecoin, on the other hand, has no built-in limit, with the number of dogecoin that can be mined at any given time varying from one to hundreds of thousands.
Nonetheless, interest in dogecoins underscores the appetite for alternative assets in an environment where 0% interest rates are prevalent as governments around the world attempt to mitigate the economic harm from the COVID-19 pandemic.
Dogecoin’s price has surged over 1,600% since its recent lows. Bitcoin is up some 48% so far this year, while the Dow Jones Industrial Average
has advanced 2.3%. The S&P 500 index
climbed nearly 4% in 2021 thus far.
Cuban, who has maintained a less euphoric view on bitcoin as well as dogecoin, said the recent moves in cryptos can serve as inexpensive teaching moments for newbie investors. He said the rise in dogecoins serves as a teaching tool for his son, citing an interview with Forbes in a tweet on Monday.
Forbes quoted Cuban as saying this of dogecoin: “[L]iterally, and I say this with all seriousness, it’s the best entertainment bang for your buck available.”
“You can buy $1 worth or $10 worth and have fun watching it all day every day,” Cuban said.
To be sure, some investors may not find cryptos as much fun, particularly if they end up barking up the wrong tree when it comes to dogecoin.
“Musk’s musings are interesting, and he can be controversial — however, it’s peoples individual interpretations and actions that are at fault,” Hayter said.