Why is Doge Going Up?
You may have noticed crypto trading is hot in May 2021. Ethereum and Dogecoin, to be honest. Suddenly, the joke alt coin, Dogecoin, is the 4th most valuable alt-coin. How can this be? The short answer is that billionaire whales like Elon Musk and Mark Cuban are pumping it to the detriment of retail investors.
Can a crypto asset be a meme crypto? That’s exactly what Doge appears to be.
The digital coin based on a Shiba Inu meme was trading at about 62 cents in afternoon trading, up about 10%, after trading near 67 cents earlier in the day. It’s cute, at least.
But in an era of crypto hype, NTFs and memes intersection with crypto, Dogecoin is the ultimate pump-and-dump in crypto today. Call it the Musk Saturday Night Live effect, or call it what you will. Everyone knows it’s a speculative asset. It’s baseline price in early 2021 was $0.05 to $0.06, so does it suddenly deserve a price action of 10x that? As Bitcoin has consolidated with less volatility, younger investors are going after the volatility of crypto trading.
- Dogecoin was started as a joke in 2013, at a time when the cryptocurrency boom was in its infancy and there was a flood of small, primitive coins entering the market.
- Doge has regained popularity, apparently boosted by attention from billionaires like Musk and Mark Cuban and easy access through free trading app Robinhood.
Crypto FOMO has been commercialized by those who have the most to gain from the volatility, whales. So much for crypto being a movement of decentralization and democratization of finance. It’s all a myth. The crypto bubble lives inside a stock market bubble, so that’s just the way it appears to be in America.
Dogecoin has been trending a lot, demonstrating how social media amplification can skew our view of reality and speculative assets.
The company was built to be a friendly introduction to the concept of cryptocurrency for the general public/layman and had a ‘fun and friendly’ brand image behind it. It appears its appeal was too good, and personalities like Elon Musk have the power to manipulate its price for financial gain with the SEC stepping in. That’s just wrong, but that’s exactly what appears to be happening.
The volatility in dogecoin did not appear to be spilling over into the larger cryptocurrencies, but may be related to Ether’s spectacular rise in the last two weeks. Mass adoption of crypto trading is also exaggerated by the flat stock market.
Traders flock to where there’s profits and volatility to be had, especially younger ones. So Elon and Mark are actually benefiting companies like Coinbase while doing this.
Its wild surge has led to warnings from some investors who view it as a speculative bubble. Elon Musk may want to make Doge the crypto of Mars, among other strange ideas.
Dogecoin has grown in popularity because of the community surrounding it. It has an almost cult-like status in the crypto world. This is of course how manipulation works on the internet of Reddit and Twitter today. Doge is a bit like the $MVIS of crypto — a meme crypto without any real correlation to anything but being a meme itself. It’s a pure-play meme crypto. As if that were a thing.
When an asset is worth $80 billions of speculative FOMO, it’s weird to see how crypto faces so little regulation, to be honest. The smallest investors are the most likely to be hurt by this. The “ownership” of crypto is the exact opposite of being decentralized, which raises questions as to how the community and hype around the space occurs.
If hedge funds control stock price volatility, it seems early adopting whales control and actively manipulate the prices of crypto assets. Clearly that’s what has occurred with NFTs.
A coin that was worth a quarter of a penny in November is now worth more than half a dollar. That’s classically what occurs in a liquidity and investing bubble. Should Ether be worth $5,000 or Bitcoin go up to $100,000? The 2020s are going to be crypto feasts of financial doom and gambling for many.
Dogecoin has attracted more interest among serious investors simply because of its spectacular rise. The constants tweets by Musk and Cuban appear to be bordering on illegal manipulation. But Twitter or the SEC aren’t doing anything about it. This is a major failure in regulation as it puts young people at risk, who aren’t able to time the FOMO.
At the Last Futurist, we try to refrain from writing about crypto due to the speculative and manipulated nature of its market. Many of our former clients were in the blockchain industry, and most of them did not make it out of the ‘crypto winter’, many even facing legal issues. Professionals, this was a dark moment for us, since we lost many of our clients simultaneously.
Doge is a fun coin, but appears to be highly volatile. The most volatile assets are always the riskiest. You cannot do your own due diligence, since it’s a pure-play meme without any real world value or activity.
Dogecoin is worth $0.629 at the time of writing. More than 10x its previous baseline value.