Dogecoin’s price has risen more than 100-times faster than bitcoin’s in 2021
A resurgent cryptocurrency market in 2021 has seen bitcoin, ethereum, cardano and others all see substantial price gains in recent months – but none come anywhere close to dogecoin.
After hitting a new all-time high of $0.67 earlier this week, dogecoin’s market cap reached close to $90 billion. This represented an increase of more than 10,000 per cent since 1 January.
By contrast, bitcoin has seen gains of roughly 85 per cent over that same time period. Even the huge 300-600 per cent price rises seen by ethereum, cardano and ripple seem remarkably modest by comparison.
Founded in 2013 as a “tongue-in-cheek” take on the nascent crypto industry, dogecoin now ranks among the top four most valuable cryptocurrencies in the world, with a market cap greater than that of SpaceX.
These massive gains are not a result of any technological advantage it holds over its rivals. Instead, it can be attributed to its peculiar origin, and the meme-loving community that grew around it.
“There isn’t anything particularly unique about dogecoin,” said Carol Alexander, Professor of Finance at the University of Sussex Business School.
“Right now, dogecoin’s price is boosted by its RRR (retail-rebel-reddit) following: it costs so little, that retail investors can hold a lot of dogecoins; it has also taken over the `rebel’ role that bitcoin used to have – two fingers up to the establishment – and it has the backing of the same reddit forces that took on the big institutional investors with GameStop, who coordinate buying after Elon Musk blows the start whistle.”
Dogecoin’s succession of record-breaking price highs has also been accompanied by unprecedented market volatility.
In its market report for April, cryptocurrency exchange Kraken recorded a record monthly volatility reading of 442 per cent for dogecoin.
The report, published 5 May, stated: “The overarching narrative behind the coin’s run this year is a protest against systemic inequities in the traditional financial industry – dogecoin is, after all, the original ‘meme asset.’”
Its price could be pumped even further this week by the appearance of Elon Musk on Saturday Night Live, with dogecoin investors hopeful that the meme-loving entrepreneur will either mention the cryptocurrency in his opening monologue, or reference it in a comedy skit.
The SpaceX and Tesla CEO has tweeted several times about dogecoin in 2021, while also claiming in an interview that it could become the “currency of the internet”. The price has spiked each time he has spoken about it, though Professor Alexander warned that his hopes for the cryptocurrency are unlikely to ever be fulfilled.
“Musk is wrong to think that dogecoin is the currency of the internet,” she said.
“It cannot be that in any real sense. Etherum and other platform coins like cardano are the currency of the internet.”