Who let the doge out? Dogecoin soars in meme-fuelled frenzy

Fans are driving dogecoin higher to mark an auspicious day, even while other cryptocurrencies continue to struggle.

The Shiba Inu-themed satirical token surged some 17% in the past 24 hours, according to data from CoinGecko.com as of 11am in Hong Kong, while the sector’s leaders extend losses. Bitcoin tumbled 3.4% to about US$54 287 for a fifth straight session of declines, and following the largest intraday drop in almost two months on the weekend. The second largest cryptocurrency, ether, fell 5.1% to $2 097 on Tuesday.

“There’s a tribe of investors, many of them millennials, who see it as a cause, a movement,” said Antoni Trenchev, the co-founder of crypto-lending firm Nexo. “Dogecoin is symptomatic of the zeitgeist happening before our very eyes.”

This latest volatility fuels talk about a bubble in crypto assets and has dented their overall market cap. Nevertheless, the total remains close to the record $2-trillion threshold surpassed a fortnight ago. Crypto’s champions are part of a iconoclastic trend, including the WallStreetBets retail traders, that’s challenging investment norms. Dogecoin’s sprint is propelled by the #DogeDay hashtag trending on Twitter, with fans including Tesla chief Elon Musk pushing for record highs on 20 April, or “4/20”.

The likes of bitcoin and ether are still up about 90% and 180%, respectively, this year as the crypto industry matures. Institutional investors such as Goldman Sachs Group and Bank of New York Mellon have stepped into the sector, and the Nasdaq listing of Coinbase Global last week has lifted crypto’s profile in mainstream markets.

Words of caution

“Bitcoin is trying to stabilise following the weekend plunge to bear-market territory,” said Edward Moya, senior market analyst at Oanda. “Institutional demand might find this massive sell-off as a buying opportunity. Bitcoin could continue to stabilise here, with a new trading range forming between $52 000 and $62 000 for the next few weeks.”

While fans of dogecoin keep making waves, some crypto investors offered words of caution.

“It really must be altcoin season,” said Justin Chuh, senior trader at regulated digital asset investment manager Wave Financial, who expects most retail investors are best off buying and holding a portfolio of just bitcoin and ether, and the Internet pile-on in the asset class only “adds to the gut-wrenching volatility”.  — Reported by Joanna Ossinger, (c) 2021 Bloomberg LP