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Dogecoin: What’s driving the recent spike?

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Dogecoin: What's driving the recent spike?

Some history on dogecoin

Dogecoin is a cryptocurrency founded by software programmers Billy Markus and Jackson Palmer as a joke, mocking the wild speculation in cryptocurrencies at the time. Despite its humorous nature, some people regard it as a viable financial opportunity. Dogecoin’s emblem and namesake is the Shiba Inu dog from the “Doge” meme. It was created on December 6, 2013, and swiftly built its own online community, eventually reaching a market valuation of US$85,314,347,523 on May 5, 2021.

The first significant theft of this coin occurred on December 25, 2013, when millions of coins were taken following a hack of the online cryptocurrency wallet platform Dogewallet. The hacker obtained access to the platform’s disc and modified the platform’s send/receive page to send any and all money to a fixed address. This hacking incidence increased the number of tweets about Dogecoin, making it the most cited altcoin on Twitter at the moment, despite the fact that it was in response to a bad event.

To assist those who lost cash on Dogewallet as a result of the breach, the community launched a project called “SaveDogemas” to assist in donating coins to those who had them stolen. Approximately one month later, sufficient funds were donated to cover the costs.

Surge in cryptocurrency

This and other cryptocurrencies rose in April 2021, aided in part by Coinbase’s direct listing on April 14, despite the fact that that platform did not support this trading. Its price originally touched $0.10 on April 14, before reaching a new high of $0.45 on April 16 (up 400% that week, with approximately $70 billion transacted in the previous 24 hours).

It’s market capitalization was approaching $50 billion at the time, making it the fifth-most valuable cryptocurrency; its value had gained more than 7,000 percent year to date. The popularity of the coin contributed to an outage in the cryptocurrency system of electronic trading site Robinhood on April 15, which was caused by “unknown factors.”

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As a result, analysts were concerned about a looming speculative bubble in the cryptocurrency market. While most analysts believe it will never hit $1 per DOGE, as TikTok users expect, CoinSwitch believes the price might double by 2040. Still, it’s unclear why the site believes the asset’s value may rise so dramatically and achieve such lofty DOGE coin price predictions.

Not so much a joke anymore

It began as a joke cryptocurrency, but its price increase this week is nothing to chuckle about. The altcoin achieved a new high of 69 cents on Wednesday morning, surpassing its previous high of 43 cents in April. It has since been reduced to roughly 55 cents. Even if it just momentarily surpassed 60 cents, it is a new milestone in its remarkable 2021. Back in January, when each token was valued about a penny, Doge supporters dreamed of the coin reaching a value of ten cents.

Over the weekend, the price of the coin began to rise. Elon Musk, CEO of Tesla, is Doge’s most visible advocate, and his tweets about the cryptocurrency usually result in a rise in its value. Musk mentioned The Dogefather and his impending hosting gig on Saturday Night Live on May 8 in a tweet last week.

Furthermore, the memecoin was listed on the trading sites eToro and Gemini, further broadening its scope. eToro alone has 20 million members, all of whom can now easily purchase it on its platform.

The increase in this coin trading appears to have caused problems for the Robinhood investing app, which stated that it was experiencing problems with cryptocurrency trading, most likely due to the increased demand.

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If you’re familiar with cryptocurrencies, you’ve probably heard of Bitcoin and possibly Ethereum. These are the two most important cryptocurrencies, but there is an entire market of smaller ones known as “altcoins” – or, in some cases, “shitcoins” – beneath them. These are the bitcoin equivalent of penny stocks. Many attempt to provide usefulness or to improve aspects of the Ethereum blockchain, which is the foundation for the majority of altcoins. Others are “memecoins,” which gain and lose popularity solely because they are amusing.

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