Dogs are a man’s best friend, but this cryptocurrency that took off as a fun take on a viral dog meme has now taken the trading world by storm, making all its investors extremely rich! The Dogecoin rally has been going strong for the last couple of days. It has grown into the fifth-largest cryptocurrency by market capitalisation, having surged almost 45 percent in the last few days.
The Mania continues
Such is the market sentiment that Dogecoin, with a net worth of almost 86 billion dollars, has outgrown the market capitalisation of companies like Honda, which stands at 54.52 billion dollars!
It comes as no surprise, given that the cryptocurrency has given the highest returns amongst all its peers, growing by over 8,000 percent. In comparison, bitcoin has a return rate of around 92 percent.
In fact, RobinHood - one of the world’s most popular trading platforms - crashed due to the overwhelming investor interest in Dogecoin. Even WazirX, India’s largest cryptocurrency exchange was down for a while for the same reason.
Punjab-based advocate Bhubnesh Garg is astounded by the uptrend dogecoin has witnessed in the past few days.
“The growth has been phenomenal, but I don’t think this will last,” he said.
Freelance journalist Kashif Shakeel agrees.
“I have dogecoin in my portfolio, but I hope to sell it in May itself. That's when I feel the tide will pass,” he said.
Doge father Elon Musk
Much of the excitement and anticipation around dogecoin stems from Elon Musk’s interest in the currency. Having referred to himself as “Doge father” in one of his tweets, he is expected to address Dogecoin in the popular Saturday Night Live (SNL) show, which will air on the 8th of this month.
The constant endorsement by the quirky entrepreneur, coupled with it being the “meme cryptocurrency” ensured that dogecoin became the most discussed and talked about altcoin in pop culture and on social media in recent times.
Many experts warn, however, that the rally is unsustainable and temporary. Shubhank Saxena, an IT professional, says that while he has invested in dogecoin, most of his investments are planned and that he does not rely solely on the currency.
The dogecoin bubble may last for some more time, but market veterans are quick to warn about the impending burst. There is no permanence or sustainability to the surge. Also, since millions of dogecoins are minted every year, it implies that there is no dearth of the cryptocurrency supply. A simple demand-supply logic would tell us that the demand for this crypto will definitely come down in the long run.
And while people are waking up to the fact that alternatives such as these might offer higher returns than conventional investments, people want to take up investing in cryptocurrency in a structural manner. Akshay Sathpaise, a Noida-based investor, wants to apply the trading strategies he has learnt to the world of cryptocurrency trading.
“I am actually excited to trade, but I do not understand the reason behind the wild volatility of these coins. I believe a proper trading system can be replicated here to trade effectively,” he said.