Digital token dogecoin was famously conceived as a “joke” cryptocurrency by its creator Jackson Palmer – but some investors are now viewing the cryptocurrency as a serious investment. However, despite the enviable gains DOGE has made in 2021, many experts are quick to point out the crypto remains worth very little.
Coindesk.com data reveals dogecoin (DOGE) is trading at $0.07038 (£0.051) as of 5pm on Thursday, February 11.
To put this into perspective, the best-performing digital assets are worth far more, with bitcoin (BTC) valued at $47,578 (£34,452), ethereum (ETH) worth $1,792.67 (£1,297) and ripple (XRP) trading at $0.52 (£0.38) during the same period.
The dogecoin price was effectively flatlining since the Shiba Inu meme-based cryptocurrency was created in 2013.
However, this all changed roughly one month ago, when retail traders frustrated by GameStop restrictions switched to cryptocurrencies.
Dogecoin’s subsequent rise – by more than 600 percent since the beginning of February – has been fuelled by celebrities on Twitter.
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Lead among them is SpaceX and Tesla head Elon Musk, who has become the de facto head cheerleader for dogecoin.
But such apparent support should perhaps not be taken on face value alone.
Elon Musk told chat app Clubhouse last week: “Occasionally I make jokes about dogecoin, but they are really meant to be jokes.”
Kadan Stadelmann, CTO of open source blockchain provider Komodo, expressed concern about amateurs investing their money in markets they may not fully understand on the back of hype.
They told Express.co.uk: “It’s difficult to gauge longer-term forecasts since there is no past reference point, but what we can say is that there is momentum behind crypto as an asset.
“Just today, bitcoin peaked above $48,000 (£34,752) and as long as the founding father of cryptos has some strength in it, the other alternative cryptocurrencies tend to hold their own as well.
“Of course, crypto is a volatile asset and if we do start to see a broader deterioration in risk assets – equities, oil, and industrial metals to name a few – then it’s likely there could be some spooking of the market and a sell-off in crypto happens. As of now, there is no sign of this happening though.
“Cryptocurrency is an asset built on sentiment and order flow in the main.
“It depends on who is doing the talking. Elon Musk talking about bitcoin or DOGE has a more solid fundamental basis to buy it than Lindsay Lohan or Soulja Boi doing the same.
“For example, Elon has hinted at Bitcoin being a payment method for Teslas – I cannot imagine what Lindsay Lohan or Soulja Boi could offer to create a reason to buy bitcoin.
“Having said that, cryptocurrency is a volatile asset and is unregulated so you need to express caution.
“That’s not to say that volatility is a bad thing at all, but it takes some stomach to hold and to understand your own risk parameters.”
One thing is for certain, though – dogecoin is no longer a joke – for now.
All the dogecoin tokens combined are now worth about $10billion (£7.2billion), climbing past the milestone and into the cryptocurrency top ten over the weekend.