Cryptocurrencies have swelled to a global market cap nearing two trillion dollars as of April 1st, 2021. From December 31st of last year, the global market cap has increased nearly 245% from a mere $0.76 trillion to $1.9 trillion. This is growth on an unprecedented scale and many crypto experts are predicting a bearish rise throughout 2021. Cryptocurrencies are selling and buying like hot cakes! But not all cryptocurrencies were created equal. One crypto hotcake that’s caused quite a stir in 2021 is Dogecoin. Dogecoin is the meme of cryptocurrency. The aptly named, Dogecoin, invokes images of the famous Doge (internet slang for “dog”) meme of a Shibu Inu speaking its doge mind in Comic Sans.
Somehow, as crypto prices have surged, Dogecoin has ridden the coattails of other coins’ success. Rising from a lackluster, $0.004894 per dogecoin on December 31st, to over $0.08 per coin in early February. For the past month and half, the meme coin has held steady around 5 or 6 cents. Therefore, in just fourth months, the doge has skyrocketed more than 1000% in price leading some online meme investors to riches beyond their wildest imagination.
But what is Dogecoin? And why is it worth anything at all? Many successful cryptocurrencies provide tangible application and value. As is the case for Basic Attention Token (BAT) which offers the free web browser, Brave. Brave is an open-sourced web browser that flips the script on the current internet browser landscape. Acting as an alternative to data mining and privacy pirates, Google and Bing, Brave blocks ads, cookies, and website trackers while offering users and content creators rewards for using the browser and interacting with any of their advertisements (which is optional). In a sense, Brave finally acknowledges that your internet data is inherently valuable and offers to pay you for it. This is a novel concept in the day-and-age of nonstop data-theft and the total absence of online privacy. With 25 million monthly average users, the search engine proves to be gaining traction. It may very well be a search engine of the future; or at least, it introduces a much-needed model for search engines that aren’t creepy, data-mining Peeping Toms.
But what value does Dogecoin provide? Well, not much. In 2013, the founders of the altcoin admitted that the cryptocurrency was created as a joke. And in a February interview with The Wall Street Journal, co-founder, Billy Markus, described the coin as, “a satirical homage to bitcoin, designed to serve no real purpose other than generating a few laughs.” Yet the coin's value is no laughing matter, Dogecoin has surged to within the Top 20 coins on the popular Cryptocurrency tracking site, Coinmarketcap.com. At one point, it even surpassed the total value of the popular clothing store Under Armor. While Dogecoin may have started out as a joke, people are buying the joke in what appears to be a crypto bubble ready to pop.
One significant reason that the meme coin has skyrocketed "to the Moon” is from the backing of prominent billionaire, Elon Musk. Elon has been a vocal advocate for all things Dogecoin. Since January, the Tesla CEO has tweeted dozens of times about Dogecoin which has successfully boosted the price of the coin over various occasions. One such boost, occurred after Elon tweeted one word – “Literally”. Ten minutes later he followed it up with another tweet, “On the actual moon.” The billionaire was referring to Dogecoin and it appears some of his nearly 50 million Twitter followers followed suit. Twenty-four hours later, the coin surged 25% in value. This of course wasn’t the first or last time that the eccentric billionaire’s tweets boosted crypto or stock values. Musk has tweeted numerous times about Bitcoin, Ethereum, GameStop, and others successfully influencing the price trajectory of such coins. The Internet has even coined the term “Musk Moves” to describe the phenomenon.
Yet another factor in the price of Dogecoin and many other cryptocurrencies, is the temperament of crypto whales. Often referred to as simply “whales”, the term is used to describe major coin investors that hold large shares of cryptocurrencies and whose movements heavily influence the price fluctuations in the crypto marketplace. Elon Musk is a whale. While he hasn’t publicly announced the dollar amount of his current investments, we can assume that the centibillionaire can afford to drop millions or even billions into the crypto market. Furthermore, Tesla announced in February that it would purchase $1.5 billion in Bitcoin in a plan to accept Bitcoin as a future payment option for its products. The ambitious move inevitably caused a spike in Bitcoin prices and other altcoins. Dogecoin is no stranger to the influence of whales. In a report released by The Wall Street Journal, one whale investor currently maintains 28% of the total market cap of Dogecoin, now valued at just under $2 billion. Could this anonymous whale be Elon Musk? Possibly. While it is certainly speculation, the Twitterstorm of crypto tweets would suggest that Elon is heavily invested. Afterall, it appears that Elon is saving up for something special. In a recent Tweet defending his position as the world’s wealthiest person, Elon expressed his intentions stating, "I am accumulating resources to help make life multiplanetary and extend the light of consciousness to the stars." In other words, he wants to take humanity “to the Moon” and beyond.
While Elon might be headed to the Moon and beyond, the everyday crypto trader most likely won’t leave the ground. The Dogecoin bubble is real and it could pop at any moment. If major whales decide to sell off their share of coins, Dogecoin’s price would plummet. To some small-time investors, it might be worth the risk. But to those cautious about where they invest their hard-earned chicken tendies (internet slang for money or investment gains), beware of the Dogecoin - the Fool’s Gold of 2021.