In the past two days, the cryptocurrency Dogecoin (Dogecoin) ushered in a plunge after hitting a record high in wild trading. Dogecoin, which used to have a total market value of as high as 60 billion U.S. dollars, fell by 14.22% in one day on April 19, reaching a minimum of about 27 cents.
Dogecoin is currently maintained at a price of 0.33 cents. According to data from coinmarketcap.com, after the plunge, its market value has fallen to approximately US$45 billion.
Despite this, Dogecoin’s gains during 2021 are also close to 8000%, which is much higher than the return rate of about 10% in the U.S. stock market. Dogecoin has been criticized for its excessive gains. According to CoinDesk, the total market value of Dogecoin’s e-commerce giant eBay is in the same order of magnitude, and the “bubble” in it can be imagined.
There has been too much analysis on the popular reasons behind this copycat digital currency, which was born entirely because of a joke. The point is, are the countless players who pursue Dogecoin now aware of the crisis?
How long can Dogecoin “fire”?
At least on the Internet, countless supporters of Dogecoin are trying to help it get rid of the image of a joke cryptocurrency and look forward to making it a quick and easy way to trade, although so far few overseas retailers have accepted it.
In contrast, the popular Bitcoin has a market value of more than $1 trillion.
Previously, Dogecoin fans used the hashtags #DogeDay and #DogeDay420 to post various emoji messages and videos on Twitter and TikTok, and prayed that Dogecoin could rise to one dollar on April 20.
▲Dogecoin from 0:00 on April 19 to the current trend
From the relevant data, the current social participation rate of Dogecoin is 931%, and the social dominance is more than 536%. Since Musk, who has consistently pursued it, has not posted any news about Dogecoin on Twitter for nearly a week, the market sentiment of Dogecoin has actually exceeded expectations.
Related market research also pointed out recently that the current price situation of Dogecoin is very absurd.
It can be said that the current community and fans’ control of Dogecoin far exceeds the fundamentals of this cryptocurrency. For ordinary players, continuing to invest in this asset will face great risks, except for those bold traders. No one dares to continue to face such fluctuations.
Edward Moya, a senior market analyst at OANDA, an online foreign exchange trading platform, said: “The current enthusiasm for trading may not allow users to completely abandon Dogecoin.” His view on Dogecoin is when the price rises. Sell as soon as possible.
Indeed, Dogecoin has risen by 8,000% in the past few months of this year. This was originally a “gizmo” launched by founder Jackson Palmer in response to the irony and counterattack of the 2013 cryptocurrency frenzy. “. However, this Shiba Inu-image cryptocurrency has now replaced widely used cryptocurrencies such as Litecoin and Tether, becoming the sixth largest digital currency.
Nowadays, this cute “Shiba Inu” is being promoted by fans and social networks (Meme), and is becoming more and more respected on cryptocurrency exchanges and more popular mainstream trading applications.
Social networks have brought fire to “altcoins”
According to CoinMarketCap’s data, Diana Biggs, CEO of the dongle startup Valour, said that more altcoins have been on fire: “The recent rise in Governor Coins represents an interesting phenomenon. In the last week, the price of Governor’s Coin has soared more than five times, reaching a record high of $0.42.”
Biggs added: “Although Dogecoin as a Meme digital currency is a joke to people who adopted digital currency in the early days, but with the promotion of celebrities such as Musk, fans of social networks have found that this altcoin is very good. Interesting, nowadays, the new generation of retail investors are centered on the Meme culture.”
The rise of Dogecoin comes from the surge in stock and cryptocurrency online transactions conducted by retail investors online. This is also the result of frequent retail speculation at home due to the new crown pneumonia epidemic this year. In fact, most digital currencies (including Dogecoin) are online There have not been many changes in online payment or commercial use.
This kind of air coin, which is difficult to have commercial value and self-entertainment, can only be a toy for speculators.
It can be seen that social networks have a huge impact on such online transactions. In particular, the extensive use of online trading applications such as Robinhood also prompted social media to promote the rise of GameStop Corp’s stock. After being suppressed by Wall Street, retail investors gathered on social networks even conducted online transactions with hedge funds. “Fire union”.
Ajit Tripathi, Head of Institutional Business of Aave, a decentralized financial startup, said: “This is an extension of the same phenomenon. The online cultural atmosphere of social networks and retail investors has caused Tesla’s stock valuation to be much higher than the fundamentals. Affected by the short-term short squeeze of GME (GameStop), they began to fight back.” Obviously, just as the GameStop incident is positioned as a battle game of’Wall Street vs. Little People’, Dogecoin will also be positioned as a match with established players such as Bitcoin A battle for the crypto giants.
Like other cryptocurrencies, Dogecoin’s current inflated price is largely influenced by social media users, especially Tesla CEO Elon Musk’s comments on Dogecoin in February. The tweet sent by Coin immediately caused its price to soar by more than 60%.
Today, Dogecoin fans are still pushing the cryptocurrency bubble. According to the forecast data of the gaming aggregator US-Bookies.com, the implied possibility of Dogecoin’s current rise is 16.7%, its value at the end of 2021. It will exceed $1, which is a big improvement from the forecast at the beginning of March (there was only a 2.9% chance at that time).
What do you think of the founder who has “run away”?
For the current popular Dogecoin, Jackson Palmer, one of its founders, is very entangled. He once tweeted: Please forget the financial properties of cryptocurrency. This technology can truly change the world. . Palmer also said that he felt it was an honor to be pushed into the spotlight as the founder of Dogecoin at the beginning.
But social media has proven to be a double-edged sword. Soon, every point he had previously expressed was questioned by the outside world.
▲Jackson Palmer, founder and founder of Dogecoin
As early as 2015, Palmer, who was extremely disappointed with the digital currency, left the Dogecoin project. Last year, it was his disappointment with social media that led him to abandon Twitter, YouTube and all other social media platforms. After that, he also reprimanded that the “coin circle” on Twitter was simply a study of large-scale indoctrination and frenzy. , An excellent place for speculation.
Currently, Palmer has begun to constantly express his concerns about the future of cryptocurrencies.
For a long time, Palmer has not increased his net worth through Dogecoin. Palmer’s personal worth is unknown to the outside world, but professional media reported last year that he was not able to make a lot of money from Dogecoin, even though the current market value of Dogecoin exceeds $50 billion.
“This is like a side project, similar to a side project that you can do casually in your spare time,” Palmer said in a recent interview with the media. “I did make a lot of people rich, but I didn’t make any money. . I just want to tell people that I created Dogecoin, which is fun.”
Palmer also pointed out that what has nothing to do with him is not only the huge wealth passing by, but also the hype and bubble generated by bankers and institutional investors on cryptocurrencies. “Actually, something behind Bitcoin’s attempt to decentralize is re-centralizing, isn’t it?” He pointed out that if at some point, Bitcoin’s currency distribution looks exactly the same as traditional Wall Street investment institutions. So what have we achieved? “
He once again expressed his concern about the future of cryptocurrency. “In general, I think the cryptocurrency field is more and more like a group of anarchists sitting together, hoping to get rich overnight, and propose some decentralization and freedom. Modern business ideas, and these ideas often end up in failure.”
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