Soaring 16 times in just one month-
Why is Dogecoin so crazy
Our reporter Li Hualin
Following Bitcoin's successive rises in historical records, another virtual currency, Dogecoin, has recently successfully "out of the circle", which has attracted market attention.
According to data provided by the well-known digital asset trading platform OKEx, as of the morning of February 8th, Dogecoin was quoted at $0.07, compared with $0.004 at the beginning of the year, a 1600% increase in just one month, far exceeding Bitcoin.
Dogecoin's hot market cannot be separated from Tesla CEO Elon Musk's "fuelling".
Recently, Musk posted a series of posts on social media supporting Dogecoin.
On February 6, Musk launched a vote on the social network "What do you want to use as the future currency of the earth". Over 1 million people participated and more than 70% of netizens chose Dogecoin.
So, why this virtual currency with a Shiba Inu head as its logo can arouse such great interest from investors, and even overwhelm Bitcoin in the limelight?
In fact, Dogecoin is not an upstart in the "coin circle". Like virtual currencies such as Litecoin, it is issued by modifying some parameters based on the Bitcoin source code. It is also a type of "altcoin".
However, its birth is full of entertainment and can be said to be a product of the prevalence of social media.
In 2013, the price of Bitcoin skyrocketed, and a large number of "altcoins" also emerged.
Australian entrepreneur Jackson Palmer and software engineer Billy Marcus created Dogecoin in order to satirize the speculative atmosphere of the "coin circle" and named a Shiba Inu emoji package "Doge" that was popular on the Internet at the time. And the logo, also set the upper limit of Dogecoin issuance to 100 billion, and 5 billion new coins are generated every year.
Compared to the limited supply of 21 million Bitcoins, it is equivalent to an unlimited supply.
Initially, Dogecoin was mainly active in the online community Reddit.
Due to its strong liquidity and low price, Dogecoin itself is entertaining and joking, and it is quickly welcomed by the market. It has grown into the second largest virtual currency after Bitcoin in terms of user volume, and has repeatedly launched a surge mode.
In January 2018, the market value of Dogecoin exceeded $2 billion.
In July 2020, Dogecoin set off a wave of climax on social media, with a surge in transaction volume and a price surge more than doubled.
By this year, the market value of Dogecoin exceeded $9 billion.
William Li, the chief researcher of OKEx Research Institute, said that Dogecoin's skyrocketing this year was not only boosted by Musk's “carrying goods”, but also related to the incident of “American retail investors holding groups against Wall Street shorts” some time ago.
In January of this year, retail investors in the Reddit community launched a war against Wall Street short-selling institutions such as Citron and Melvin, which once pushed up the shares of previously low-priced game retailer GameStop several times.
"This incident aroused people's enthusiasm for investment. The recent surge in Bitcoin and Dogecoin is also a continuation of the incident." William Li said.
So, under the ferocious rise, can the price of Dogecoin surpass Bitcoin in the future?
Some experts said that the current circulation of Dogecoin has far exceeded the total issuance of Bitcoin, reaching 128 billion. Due to the huge issuance and the relatively stable price, it is destined to be difficult to surpass Bitcoin.
So far, the highest price of Dogecoin has reached $0.08.
The industry's voices reminding investors to enter the market cautiously have continued.
In the final analysis, Dogecoin, like Bitcoin, has no actual value support, lacks a credit subject, and the only way of circulation is waiting for others to take the order. Moreover, Dogecoin holders are highly concentrated, and it is easy to control the price.
"Like other virtual currencies, Dogecoin can be obtained through mining. It requires much less computing power than Bitcoin, and there is almost no technological breakthrough." William Li said that the current Dogecoin "fans" mainly will It is used for investment transactions, charity payments, etc., and has no unique applications, and some application scenarios also face extremely high legal risks.
Dogecoin was born out of joking, but its current development has exceeded the expectations of its founder.
Jackson Palmer once said in a post that too many people entered with the mentality of "getting rich overnight", which runs counter to the original intention of Dogecoin.
In 2019, he emptied the content he posted on social media and disappeared into the online world.
"Dogecoin's fire is mainly due to Musk's "carrying goods". If Musk does not continue in the future, or there is no actual support action, Dogecoin will fall to its original level and even risk a crash. "William Lee said.