Dogecoin Market Cap Hits $2 Billion: Launched as 'Joke Currency'

To many investors and analysts, cryptocurrencies truly stepped over the line when dogecoin was launched as a "joke currency" in 2013. The digital currency is based on a popular meme about a Shiba Inu dog. While most digital currencies offer (or at least purport to offer) some benefit in terms of transaction speed, blockchain usefulness, or practical application, dogecoin appears to simply be an attempt to cash in on the popularity of cryptocurrencies.

As such, some investors have speculated that the fact that dogecoin has not only continued to remain in existence, but that it has also become increasingly popular since its launch, spotlights a cryptocurrency bubble in which speculators will invest in anything and everything out of a sense of investment fervor. (See also: Bitcoin Vs. Litecoin Vs. Dogecoin: Comparing Virtual Currencies.)

No Laughing Matter: Market Cap Tops $2 Billion

On January 7, 2018, dogecoin's market cap soared to more than $2 billion for the very first time, CNBC reported. This took place around the same time that ripple, another popular digital currency, surpassed ethereum to become the second-largest cryptocurrency by market cap, making its co-founders billionaires in the process. (See more: Ripple Execs Are Now Billionaires Thanks to XRP's Success.)

The massive growth in dogecoin mimics (on a smaller scale) the increase in value of many digital currencies over the past year, including bitcoin, ethereum, and others.

But to its detractors, dogecoin is nothing more than a joke. The cryptocurrency was launched in late 2013 as "the internet currency," according to Vice, with a design that was aimed at creating a community of generous participants rather than a get-rich-quick scheme.

Dogecoin made headlines in 2014 when it was used as a tool to help send the Jamaican bobsledding team to the Winter Olympics (it finished in last place). Since then, dogecoin has also sponsored a Nascar team.

Price Spiked 400% In the Past Month

Since its brief stint in the spotlight in 2014, dogecoin has remained relatively obscure. No software updates have taken place in more than two years, and the cryptocurrency has not made headlines for publicity stunts like it did in its first year of existence. Still, dogecoin has climbed in value by more than 400% in the past month alone. The result, though, is that a single dogecoin is worth just over $0.01.

In response to the recent massive growth, dogecoin co-founder Jackson Palmer expressed concern. "It says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over two years has a $1 billion+ market cap," he explained in a recent interview.

Is dogecoin's recent growth spurt a result of speculation gone out of control, or is it part of a more sustainable and overwhelming revolution that is propelling digital currencies into the future? Only time will tell. (See also: How Did Cryptocurrencies Perform Compared to Stocks in 2017?)

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrency.