Meme-based cryptocurrency Dogecoin becomes fourth-biggest digital coin

MEME-BASED virtual currency Dogecoin soared to an all-time high yesterday, extending its 2021 rally to become the fourth-biggest digital coin.

Dogecoin, launched as a satirical critique of 2013’s cryptocurrency frenzy, climbed 41 percent in 24 hours to a record $0.68 (about R9.82), according to CoinMarketCap.

This year alone, it has soared more than 14 000 percent, from $0.00468 on December 31, taking it past more widely used cryptocurrencies, such as the Tether stablecoin and XRP, to become the fourth-largest by market capitalisation.

Dogecoin – whose logo features a Shiba Inu dog at the centre of the meme – remains little used in commerce or payments. Like other digital coins, it is highly volatile, and its price is heavily influenced by social media users.

On Tuesday, the New York crypto exchange Gemini said it would start letting users trade and custody the token.

Some cryptocurrency market players said its volatility was its main draw, with a mixture of retail investors and market makers fuelling its trading volumes.

“The ugly truth is that a lot of crypto valuations are divorced from reality anyway,” said Joseph Edwards, the head of research at crypto brokerage Enigma Securities.

“Right now, (Dogecoin) is being seen as it’s always been seen: an asset with surprising staying power that provides opportunities to take advantage of volatility every year or so.”

Dogecoins are now cumulatively worth $88 billion, compared to Bitcoin’s $1 trillion and Ethereum’s $391bn.

REUTERS