The cryptocurrency, invented as a joke and meme, has renewed its all-time high at $0,69. Its capitalization exceeded $87 billion.
It happened after the appearance of the asset on the Gemini cryptocurrency exchange. Users of the marketplace founded by the Winklevoss brothers can trade and store Dogecoin. Later, access to DOGE will be opened in mobile and web applications.
On May 3, the eToro trading platform announced plans to start trading Dogecoin. The decision was made due to the high customer demand for the digital coin. And on May 4, the Bitfinex crypto exchange launched altcoin margin trading.
Last week, Tesla and SpaceX CEO Elon Musk once again mentioned the cryptocurrency on his Twitter account. “The Dogefather. SNL May 8.” This is how the billionaire announced Saturday Night Live, which he will host on May 8 with singer Miley Cyrus. Mentions of cryptocurrency and other assets on Musk’s Twitter have repeatedly caused their value to rise.
We would like to remind you that Dogecoin has strengthened by 11,821% since the beginning of 2021. According to this indicator, it is many times ahead of the largest cryptocurrencies in terms of capitalization — Bitcoin (96% growth since the beginning of the year) and Ethereum (347%).
Growth reasons
In late January, Tesla CEO Elon Musk began actively mentioning Dogecoin in his tweets. Apart from the digital coin jokes and memes that he posted back in 2019, he started talking about the challenges and prospects of Dogecoin. For example, according to Musk, the main disadvantage of altcoin is that its reserves are concentrated in a small number of addresses. Musk even offered money to the largest Dogecoin holders to sell their digital coins.
Against the background of these statements and statements on the Wallstreetbets forum (an active community of amateur traders on the Reddit site), the value of Dogecoin has increased several times, reaching $ 0.087 at the end of January. The next cycle of the coin’s growth began in April when Elon Musk again spoke about the cryptocurrency. On April 1, he probably joked that his company SpaceX would literally send Dogecoin to the moon. Half an hour after the publication of this tweet, the digital coin has risen in price by 20%.
The wider adoption of Dogecoin as a means of payment continued. For example, Newegg, a large online store of computer components and consumer electronics, began accepting cryptocurrency for payment. In mid-April, the Dallas Mavericks NBA basketball club owner, Mark Cuban, announced that his team had amassed over 120,000 Dogecoins in just a month. In March, the club began accepting digital coins as payment for tickets to games.
And in early May, the Oakland Athletics baseball club began selling tickets for the games that will take place May 3-6 for Dogecoin. The fans of the team now have the opportunity to purchase tickets for two for 100 Dogecoin.
“Bubble signs“
In addition to Elon Musk’s tweets, there are other reasons for Dogecoin’s growth. Dogecoin and other coins like TRON and XRP are on the rise as investors shift assets from bitcoin to altcoins in search of maximum returns.
LATOKEN experts could say that the coin shows signs of a bubble — in a short period, the asset increased its capitalization to $70 billion.
Most of the cryptocurrency is concentrated on a small number of wallets, so the exit from an asset of one holder might immediately bring down the rate.
It is possible that along with the growth of Dogecoin, the hype around the coin might also come to an end.
Unlimited emission
Dogecoin has a cost limit since the coin has a negative factor in the form of the total emission. New digital coins continue to be “printed,” and this process cannot be stopped since there is no such mechanism in the source code of the altcoin.
What happens to an asset that is printed in unlimited quantities? That’s right. It starts to fall in value.
Now Elon Musk and his followers have the opportunity to pump up the price of Dogecoin with their capital and influence, but these opportunities may soon run out. Many experts believe that an optimistic scenario for an altcoin is only possible if the digital coin code is edited to make its emission limited. Otherwise, Elon Musk might eventually forget about Dogecoin and find another coin for speculation.
Should you invest in DOGE or not? We can’t be sure. Think twice before making any decision. LATOKEN specialists once again want to warn that cryptocurrency is a volatile asset that can lead to financial losses.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.
