Dogecoin has not peaked, but it is the third favorite 'crypto' in the US
Despite its origin as a 'joke currency', there are bullish signs for the remainder of the year
It has been one of the stars of the first half of 2021 and although part of the craze around dogecoin has faded, its role in the cryptocurrency market is indisputable, to such an extent that it has placed itself on the podium of the most popular crypto investments both in the US and the UK, behind bitcoin and ethereum. The future is uncertain for this digital currency that was born as a joke, but which has a good legion of followers, led by the founder of Tesla, Elon Musk.
The adoption of cryptocurrencies has seen spectacular growth in 2021, with more than 300m users of ‘crypto’ worldwide and 18,000 companies already accepting payments with these digital assets. Although bitcoin and ethereum, as the world's largest digital currencies, continue to have the highest ownership rates in the crypto space, dogecoin has carved out a good niche. According to data presented by TradingPlatforms.com, a quarter of US crypto investors have chosen dogecoin in 2021, compared to 15% in the UK.
Measure Protocol data shows that dogecoin is the third most popular cryptocurrency to invest in in both the United States and the United Kingdom. However, bitcoin continues to convincingly top this list in the two countries, with an ownership rate of 80.7% and 70%, respectively.
Ethereum ranks second, with a 35.7% share among US investors and a 37.3% ownership rate in the UK. Litecoin and Bitcoin Cash round out the top five list.
INCREASE IN ITS CAPITALIZATION OF 2,700% IN 2021
Dogecoin started way back in 2013 as a joke between two computer scientists, but it quickly gained popularity. IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer successfully combined two of the biggest phenomena of 2013: bitcoin and a dog meme, "doge," to create a new cryptocurrency. that people started using as soon as it was released. More than a million unique visitors came to dogecoin.com in the first month of the website.
However, it was in 2021 that the popularity of dogecoin has exploded. In February, the digital currency captured public attention when Elon Musk and rapper Snoop Dogg sent a flurry of tweets about it, driving its price up. The value continued to grow in the following months, reaching an all-time high of $ 0.7 on May 8. Although this figure dropped to $ 0.24 last week, it still represents a remarkable 2,400% increase from the beginning of the year.
In the last six months, dogecoin has also achieved the milestone of placing itself among one of the top ten cryptocurrencies by market capitalization. In January, the combined value of all dogecoins in circulation amounted to about $ 1.1 billion. Following Musk and Snoop Dogg's tweets about the coin, this figure soared to $ 6.5 billion the following month.
In April, the market capitalization of dogecoin reached $ 50.5 billion, a staggering 4.500% increase in four months, and continued to climb. On May 8, it hit an all-time high of $ 93.5 billion, then suffered a major setback following the recent drop in cryptocurrency prices. Last week, it stood at $ 31.5 billion, a whopping 2.700% increase from the beginning of the year.
WHAT TO EXPECT IN THE REST OF THE YEAR
Despite its non-serious origins, dogecoin now enjoys a number of potentially bullish factors, which make it less easy to write off as an asset. The risk for investors remains high, as is the case with all 'altcoins', but the low energy costs of dogecoin, the possibility of a shared security protocol with bitcoin, the willingness of some large companies to accept it for their purchases ( and the possibility of more joining them) and some price stability are generally positive signs. Although it cannot be measured directly, dogecoin can also benefit from the considerable goodwill of its "fan base" of two million retail investors.
However, experts advise about placing our money in these types of currencies, the so-called ‘meme currencies’. Cryptocurrencies, in their purest form, are revolutionary and will do with money what the Internet did with data, but these types of currencies "make this industry seem like a playground," warns Antony Portno, founder of Traders of Crypto. "It is reminiscent of the Internet 'boom' of the early 2000s, when companies added '.com' to their brand even without having a website and saw their valuations rise enormously," adds this analyst.
Translated by Caoimhe Toman