Dogecoin jumped as much as 41% in the last 24 hour period to $0.4446, the highest point in nearly two weeks, as Coinbase Pro opened up to the meme cryptocurrency.
The cryptocurrency exchange announced on Tuesday it is allowing its Pro users to transfer dogecoin into their accounts. Pro users will be able to trade dogecoin on or after 9 a.m. PT on Thursday if liquidity conditions are met, according to a Coinbase blog post.
The Coinbase Pro account is a free account designed for more experienced traders and offers advanced charting and analytical tools. Dogecoin is not yet available on Coinbase.com or via the consumer mobile apps. The exchange said it would make a separate announcement if and when that support was added.
A new tweet from Elon Musk also added to doge’s rally. At roughly 3:30 am ET Musk tweeted a picture of the doge shiba inu sitting in front of a computer with the quotation “I’ll have to keep my passion hidden from the public or I’ll be socially ostracized.” Musk joked that it was a picture of him as a child.
Dogecoin was trading above $0.42 as of 9:35 a.m ET Wednesday, according to CoinMarketCap. It has fallen significantly from its all-time high above $0.73 reached last month, but it’s still up nearly 7,260% year-to-date. The cryptocurrency which began as a joke, is currently the sixth largest cryptocurrency in the world, with a market capitalization of over $54 billion.
Dogecoin differs from bitcoin in that there is no hard limit on the total supply of coins. Bitcoin has a fixed supply of about 21 million coins, of which not all have been mined yet. Dogecoin on the other hand has more than 129 billion coins outstanding, with 5 billion in new coins hitting the supply every year.
Even the founder of dogecoin, Billy Markus, can’t make sense of the surge in the coin he started as a joke. Markus told The Wall Street Journal in February, “The idea of dogecoin being worth 8 cents is the same as GameStop being worth $325, it doesn’t make sense.”
Dogecoin’s unlimited supply and the bewilderment of its founder hasn’t stopped investors from piling into the meme token, making it now more valuable than these 10 well-known companies, based off of Wednesday afternoon prices.
Dogecoin dropped over Wednesday night and into Thursday morning as the red-hot rally in the joke cryptocurrency faltered.
The coin was down 11% to $0.28044 in the 24 hours to 9.55 a.m. ET, according to CoinGecko. That was 32% off the record high of $0.41888 reached on Tuesday.
Despite the fall, Dogecoin remained 375% higher than 14 days earlier. It had climbed 14,200% over the year to Thursday.
The breakneck rally in a cryptocurrency that was started as a joke in 2013 has astounded traditional financial analysts.
Dogecoin has benefited from the frenzy around cryptocurrencies that has consistently pushed bitcoin and ether to record highs over recent months.
But a groundswell of support for Dogecoin built up on the internet in recent days, boosted by celebrities such as Elon Musk. It has drawn comparisons to GameStop, the video game store whose stock traders organizing themselves on Reddit pumped up in January.
“DOGE has, of course, already experienced a massive speculative price push, which has, quite interestingly, held up for an extended period of time,” Justin d’Anethan, head of exchange sales at crypto exchange Equos, said.
“Volatility is a double-edged sword, though, and prices ramping up quickly in strong days can fall back very quickly.”
Neil Wilson, chief market analyst at trading platform Markets.com, said: “It’s the definition of a speculative bubble and the ‘greater fool theory’ in action. They go up and up and when gravity decides to act, it acts fast.”
Dogecoin fell 20% on Wednesday after the meme cryptocurrency touched an all-time high of close to $0.42 the previous day in the wake of a remarkable rally.
Fans of the digital asset, which is based around the Shiba Inu Doge meme, celebrated April 20 as ‘Doge Day’ and helped push the coin up to record highs. Even businesses such as Slim Jim and Snickers got involved.
But Dogecoin fell 21% in the 24 hours to 7.45 a.m. ET, according to CoinGecko, taking it to $0.3075. That compared to an all-time high of $0.4188 touched on Tuesday.
“The current retail fervor probably won’t completely give up on Dogecoin, but a sell-the-event reaction [to Doge Day] could be in the cards,” Edward Moya, senior market analyst at currency firm Oanda, said.
Nonetheless, the cryptocurrency’s 14-day gain stood at 376%, while its 1-year gain was an astounding 15,470%.
Its rally has been driven by celebrities such as Elon Musk, who played a part in the latest jump by tweeting an image of “Doge Barking at the Moon” on Thursday.
Many Dogecoin fans had hoped it would rise to $0.50 or even $1 on Doge Day but were left disappointed.
Analysts have compared the Dogecoin phenomenon to GameStop, which day traders sent soaring in January.
Analysts at the Kraken Exchange said in a note on Tuesday: “As the [GameStop] saga has shown, as well as DOGE’s price action thus far this year, there’s no telling how high memes can send an asset.”
Yet many are warning that investors could get burned. Susannah Streeter, senior investment analyst at Hargreaves Lansdown, said: “Investors should be extremely cautious about getting caught up in this herd mentality because Dogecoin is very much a speculative bet.”
Dogecoin is the earnest cryptocurrency, born out of a meme that its creators thought was “hilarious.” Now, that random joke created to lampoon the market is becoming a valuable asset itself. Just this year, the animal-themed currency went from trading for less than a penny to hitting a price of 14 cents by mid-April, with 11.7 billion units circulating. Elon Musk, the founder of Tesla, tweeted pictures of Shiba Inus, and YouTuber Marques Brownlee described Dogecoin as “the more accessible, less intimidating crypto for the people.”
“There are many different reasons that people are buying it, and it’s more or less gone mainstream at this point,” said Billy Markus, an IBM engineer and a cocreator of Dogecoin. “It’s one of the most volatile assets you can make a bet on, but people right now have a lot of reasons to make that bet, and that is being reflected in the market.”
Dogecoin started as a joke that quickly grew into a larger movement
Most alternative cryptocurrencies, known as altcoins or clone coins, are fundamentally similar to Bitcoin. They can be “mined” by computers that run complicated equations to create these new assets that can be stored online or offline. In 2013, Markus had tried using his gaming computer to mine Bitcoin when he wasn’t gaming, but said that he found that it “was a very slow and expensive process.”
Using a guide he found online, Markus taught himself how to create his own altcoin. His first was “Bells,” based on the currency in the popular Nintendo life simulator “Animal Crossing,” which he said “flopped.” After spending some time in an internet chat room, he was directed to the Adobe developer Jackson Palmer, who had purchased the Dogecoin.com domain name.
“I found that there was a huge market with new coins coming out daily, and at times hourly, all touting how they were going to become worth zillions and take over the galaxy,” Markus said. “I thought it was silly, and also thought that, considering there were so many coming out, it was probably easy to make.”
Doge, one of the internet’s earliest memes to break through to the mainstream, features a 2010 picture of a yellow Shiba Inu looking quizzically into the camera. In 2013, the meme template of two-word phrases juxtaposed with the curious canine gained worldwide appeal, making it the perfect target for this project.
The pair collaborated, creating a currency so ingrained in meme culture that it would be impossible to take seriously. The website was covered with Comic Sans font, a popular motif of the Doge meme inspired by gibberish such as “much wow” and “so currency.”
“The original intent was a parody of all the ‘serious’ clone coins that were trying so hard to differentiate themselves, but all seemed the same,” Markus said. “Dogecoin was just another clone coin, but instead of taking itself seriously, it was just Dogecoin.”
Over the next few years, Dogecoin would pick up with the irony-loving nihilists who feel the concept of currency is fundamentally flawed, and may have been more interested in “lulz” instead. In 2014, Dogecoin users raised $30,000 to send the Jamaican bobsled team to the Winter Olympics, a reference to the 1993 film “Cool Runnings,” and $50,000 to Charity: Water, which helps give clean drinking water to developing nations.
Palmer would leave the crypto community in 2015, giving over development duties to a group of community followers. “I saw the space being overrun by opportunists looking to make a buck, rather than people investing in evolving the technology,” Palmer wrote in a Vice story.
The value of Dogecoin comes from its meme status
As long as computers can run the equation, Dogecoin may never run out. Unlike Bitcoin, which has a set number of units that can be mined, the yellow dog on a coin can be bought and sold for cheap. For the past decade, Dogecoin could be bought by the thousands for almost nothing, making it easy to collect. This “friendly, low barrier to entry,” Markus said, has allowed the coin to go mainstream in a way that a lot of ironic art rarely does.
Over the past few years, cryptocurrency has exploded in popularity, with Bitcoin hitting a record $64,000 this week. This mainstream awareness created by this virtual gold rush has inspired a fear of missing out that is causing cryptos to skyrocket in value.
“I think the market has been trying to figure out what the intrinsic value of all cryptocurrency is over the last 12 years,” Markus said. “It hasn’t settled on one yet.”