The cryptocurrency that started out as a joke in 2013, Dogecoin, is now one of the Top 10 most valuable cryptocurrencies of the year.
With the internet full of meme fanatics and jokesters with knowledge on trading, coupled with the tweets of a certain CEO named Elon Musk, this cryptocurrency was able to climb mile-high peaks, high enough to go "to the moon."
How Did Dogecoin Gain Traction?
In July 2020, a viral video on TikTok urged people to invest $25 in Dogecoin, temporarily pushing the price from approximately $0.0028 to $1, according to CoinDesk. With no cap to the supply of coins, the meme cryptocurrency can inflate, in theory, infinitely. More interest in purchasing Dogecoin was seen as the trend #TikTokDogecoinChallenge picked up steam.
Developers of Dogecoin then warned people in a tweet when the spike had trading volume increase by 1,900 percent.
Be mindful of the intentions people have when they direct you to buy things. None of them are in the spot to be financially advising.— Dogecoin (@dogecoin) July 8, 2020
Make choices right for you, do not ride other peoples FOMO or manipulation.
Stay safe. Be smart.
It returned to its regular price range shortly after until January 30, 2021 when it rose to $ 0.05193 from $0.007432 only two days prior. A rise in price was seen shortly, with Elon Musk "breaking" his Twitter hiatus with a cryptic one word tweet: "Doge." Prices plateaued in its high price mid-February to early April. When someone on Twitter asked the Tesla CEO why he loved the cryptocurrency so much, he replied "I love dogs & memes."
I love dogs & memes— Elon Musk (@elonmusk) February 24, 2021
Dogecoin to the Moon
At the beginning of April, the cryptocurrency saw a spike, hitting the 10 cents mark. The price pump started on Reddit and Twitter when people wanted #DogeToTheMoon, RepublicWorld reported. The Dogecoin Twitter account celebrated with a photo of Musk riding the famous dog meme to space. The tweet, and the responses, acknowledged the key role the CEO has had in the rise of Dogecoin stock prices.
On April 1, Musk tweeted "SpaceX is going to put a literal Dogecoin on the literal moon." Musk's constant tweeting of the meme-inspired cryptocurrency has been one of the steady forces keeping the prices up. However, prices dropped in the middle of April. This may be due to people selling their Dogecoins, seeing as they could earn a profit from these high prices. This caused a chain reaction, leading to the dip in prices, RepublicWorld explained.
That dip did not last for long when Musk tweeted yet again, announcing his appearance on "Saturday Night Live" with "The Dogefather." Mark Cuban, the owner of the Dallas Mavericks, also tweeted about Dogecoin, backing the cryptocurrency, stating that "people actually use [it] for transactions."
Because Doge is the one coin that people actually use for transactions. We take many others via @BitPay . But people spend their Doge and that means more businesses will start taking it. The greatest inhibitor to it's growth is that you can't spend the Doge you buy on Robinhood https://t.co/TrhT9pYkcb— Mark Cuban (@mcuban) April 26, 2021
Dogecoin Price Predictions: Lean on Elon Musk Tweets
The endorsement of such high-profile individuals had prices hiking up yet again, leading to some investors wary of the inevitability of Dogecoin to create a bubble and bursting. However, that isn't stopping retail traders from buying and selling their stocks to earn profits in stock trading apps like Robinhood, CNBC pointed out. In fact, Elon Musk's tweets are becoming major pillars in predicting the price trends.
In fact, on Thursday, Musk tweeted about Dogecoin again, posting a photo with the word "Cyberviking" written on it. On his caption, he wrote "How much is that Doge in the window?"
The said tweet sparked an 11 percent increase in Dogecoin value just hours after it was posted, with the meme coin hitting 40 cents.
To recall, when Tesla Inc. revealed they would stop accepting Bitcoin as payment, citing the unsustainable practice of Bitcoin mining, Musk suggested Dogecoin as a suitable investment. He tweeted: "Working with Doge devs to improve system transaction efficiency." He also called this project "potentially promising."
Bitcoin prices took a deep plunge while Dogecoin shot higher, reported Market Watch. Musk shortly took to Twitter asking the Twitterverse on a poll if Tesla should accept Dogecoin as payment. 4 million voted yes, an 80% of the poll participants.
As Musk continues to tweet about the meme and its namesake cryptocurrency, the volatile nature of trading in this market is more and more apparent. Despite disclosing he hasn't and "won't sell any Doge" in a tweet to a user, prices still see a lot of highs, keeping traders on their toes, waiting for Musk's next cryptic tweet about the dog meme.