4 Min Read | June 09, 2021
Dear readers, I am sure you are aware of how Bitcoin is dominating the cryptocurrency market. But its meme currency Dogecoin is the talk of the town!
With millennials like us joining the investment bandwagon, this cryptocurrency’s popularity has touched the sky. It has pushed the Dogecoin price even more.
If you were caught up in something and could not catch up with this ongoing fuss of the Dogecoin price spike, you can have a sneak at the blog explaining the same on our new Convey platform.
Dogecoin’s popularity has flooded the internet. The question that must have crossed your mind is, why so?
What made Dogecoin so successful?
Is Dogecoin the next Bitcoin?
Are there any Dogecoin Millionaires, yet?
Let us find out!
By now, most of you know what Dogecoin is and when it was created. If not, here is a short introduction.
The meme cryptocurrency Dogecoin came into existence as a joke in 2013. An IBM programmer, Billy Markus and Adobe Product Marketing Manager, Jackson Palmer wanted to create a digital currency that would have a better reach than Bitcoin. In fact, it served as sarcasm to all the fake cryptocurrencies that were created around that time.
But, it was the name of that digital currency that turned all the eyes.
The term ‘Dogecoin’ was themed around the popular meme of ‘Doge’ (featuring Japanese dog Shiba Inu) and Bitcoin that had started to catch the attention of the masses. Thanks to the support it got from the internet space, there was no looking back.
In case you are interested in an in-depth origin story for Dogecoin, you can easily find it in our previous blogs on Dogecoin.
In December 2013, Dogecoin value surged by 300% within 3 days. Not only this, within 15 days it lured more than 19,000 users on Reddit.
But, soon enough, it witnessed the first major fall after China directed all the Chinese banks not to invest in Bitcoin. The pattern of surge and fall continued and by the end of 2017, the Dogecoin market capitalization had touched the mark of $20 million.
After 2017, investment in Dogecoin became cold. It was only in 2020-21 that Dogecoin became a trend.
The popularity is growing so rapidly that a guy named Glauber Contessoto from Los Angeles became a Dogecoin Millionaire within just 69 days of investing in the meme cryptocurrency. Further, according to CoinMarketCap, it has become the 5th most valuable cryptocurrency after rising by 6,000% in 2021.
Here is another anecdote for you that will depict Dogecoin’s recent success.
On April 16th, 2021, when the Dogecoin price reached an all-time high (and its market capitalization touched the $49 billion mark), cryptocurrency trading on the Robinhood app was disrupted for a short while due to heavy demand from users.
Well, it has become a sort of internet sensation!
Before we find out the reason for Dogecoin’s popularity, have a look at the following graph that serves as evidence of this fact!
Source: Markets Insider
Now that you have some statistical insight let us move to the explanation part one by one!
One of the major catalysts of Dogecoin’s success is the endorsements done by popular faces on social media platforms such as Twitter. Some of the public figures that showered their direct or indirect support to the entire concept of Dogecoin include rappers Lil Yatchy and Snoop Dogg, actor Carole Baskin, singer Gene Simmons, etc.
But, it was the series of tweets done by Tesla’s Elon Musk that sealed the deal. In March 2020 he began with some random tweets related to ‘doge’. Till the end of last year, he continued to do so every now and then. As a result, on December 20, 2020, the Dogecoin price rose by 25%.
If you think, he stopped right there, then let me tell you, no, he did not! The pattern has continued into 2021.
In January this year, he tweeted a picture of Dogue magazine that had a dog on its cover page and in April yet another tweet followed. Well, when the second richest man in the world pushes some piece of news on social media, it will definitely create a buzz and that is what happened in the second week of April.
The Dogecoin price hit an all-time high of $0.45!
Thus, Elon Musk’s tweets have acted as one of the most dramatic reasons for Dogecoin’s success.
As you are aware that Dogecoin was born as a meme version of Bitcoin?
Memes are the language of the millennials and Generation Z. Therefore, it is gathering popularity among those crypto investors who are looking for some inclusive yet fun cryptocurrency investments.
The current success of Dogecoin is driven by the buzz on the internet and does not follow any theoretical fundamentals. Therefore, people who do not want to indulge in investments done on the basis of fundamental analysis often get attracted to these options.
As the Dogecoin millionaire, Glauber Contessoto said, “Doge is powered by the regular, everyday person, a retail investor that just wants to make a difference for themselves and a difference in the world.”
The third possible reason as to why Dogecoin became so successful is the constant push made by the Dogecoin community formed by some Reddit users.
Yes, those of you who are not aware, some of the Reddit users have formed a strong community for some years now and they continue to invest heavily in Dogecoin. The so-called Dogecoin community on Reddit aims to push the price of Dogecoin (priced at $0.476991 on May 18) to $1 in the near future.
Therefore, increased buying of Dogecoin by this community on Reddit has definitely aided its success.
Well, this question brings in two schools of thoughts here.
On one hand, the traditional investors and experts believe it to be a bubble. On the other hand, a section of cryptocurrency investors and many popular faces are affirmative about its long-lasting success.
If you look at the facts, then Bitcoin is a relatively safer investment as compared to Dogecoin because the former has a defined ecosystem. There are only 21 million tokens available. Given the fact that Bitcoin comes in limited availability, the probability that its price would surge is high.
But, with Dogecoin there is no such limitation and hence its future performance is undefined.
Dear Convey Warriors, our blog ends here.
Would you prefer to invest in Bitcoin or Dogecoin?
Let us know in the comments below.
If you want to explore more about Dogecoin, you can navigate through our previous blogs and wait for the next ones too.