Nobody could have foreseen Dogecoin as the protagonist of a cryptocurrency story. As the joke cryptocurrency’s popularity soared, its market value faded like a candle flame in the wind in recent weeks. It reached an inconceivable high before plunging to the ground. What began as a cryptocurrency joke soared to a new high earlier this week, with a market valuation of more than $50 billion. As a result, Dogecoin’s market worth surpassed that of Ford Motor Company and Kraft Heinz Company, American food and beverage companies.
The spike was fueled just before Doge Day, which is observed on April 20. Fans of the cryptocurrency poured money into it in droves, causing its price to soar to new heights. Dogecoin was praised on social media and, of course, got the support of tech mogul Elon Musk. Everything was going swimmingly until it all came crashing down. Investors pulled their money when they recognized the spike was too high to sustain for long, pushing the market cap down from $50 billion to about $45 billion in just a few days.
It isn’t easy to pinpoint anything special about Dogecoin that could explain its meteoric rise. However, there is an important overall trend to be aware of. It turns out that retail investors are still heavily involved in cryptocurrency trading. Coinbase Global, a cryptocurrency trading platform, released its quarterly financial results earlier this week. According to the company, monthly transactional users (MTUs) on the business’s platform climbed by 44 percent from the previous quarter. Furthermore, trading volume rose by 38% throughout this period. Dogecoin is the world’s seventh-largest cryptocurrency by market valuation, according to the website CoinMarketCap.
As more people begin to trade cryptocurrency, Dogecoin is likely to be near the top of their list of coins to purchase. Investors couldn’t previously trade Dogecoin on Coinbase, but the company began supporting the cryptocurrency on June 3, allowing Coinbase’s over 9 million MTUs to participate. And, like with anything in economics, when demand for dogecoins exceeds supply, prices will rise, as they have in the last week.
Dogecoin investors are wondering where the cryptocurrency will go from here. However, the answer is a contentious one. To acquire their opinion, a company called Finder polled 42 bitcoin professionals. According to the survey, 80% of respondents feel Dogecoin is a fad. Some experts, however, anticipate that the price will continue to rise this year before the bubble bursts next year. Some even expect that the price of a dogecoin could reach $1 this year.
A closer examination of Finder’s survey findings reveals a diverse spectrum of viewpoints, including the possibility that Dogecoin will be nearly worthless by the end of the year. To put it another way, the so-called experts are severely divided. But here’s the thing: They’re split because no one (including you and me) knows what the future holds for Dogecoin with any certainty.
Unlike equities, it’s challenging to build a firm conviction in a Dogecoin investment. Because stocks reflect ownership shares in a real-world business, you can develop strong beliefs. A company with a lot of recurring revenue makes it much easier to forecast future cash flows. Investors can build a bullish thesis and allocate a significant portion of their portfolios to promising possibilities in that circumstance. That isn’t the case with Dogecoin and other cryptocurrencies. That isn’t to say Dogecoin can’t go higher; it certainly can. That isn’t to say you shouldn’t invest in cryptocurrency. It simply means that you should support following your level of conviction.
In the early hours of Friday, Dogecoin was trading 6.85 percent higher at $0.3194 after trading for 24 hours.
At press time, the cryptocurrency was up 13.7 percent during a seven-day trailing period. DOGE traded 0.84 percent higher and 0.45 percent lower against Bitcoin and Ethereum, respectively. DOGE has increased by 5,517.8% since the beginning of the year. At press time, DOGE had followed more prominent cryptocurrencies into the green, with the global cryptocurrency market capitalization rising 6.35 percent to $2.03 trillion.
According to data from Cointrendz, the Shiba Inu-themed cryptocurrency was among the most cited coins on Twitter Inc’s (NYSE: TWTR) social media site at press time. Robinhood Markets Inc (NASDAQ: HOOD), a major online brokerage for retail investors, revealed its second-quarter earnings on Wednesday, revealing that revenue from cryptocurrency increased to $233 million from $5 million a year ago.
Significantly, DOGE accounted for 62 percent of cryptocurrency-based revenue in the period, up to 34 percent in the previous quarter. “When you peel the onion of Robinhood, it seems like it’s a Dogecoin gateway,” remarked television host Jim Cramer, who was surprised by the DOGE income data.