This joke has gone pretty far.
Dogecoin, a cryptocurrency that was started as a joke, was the best-performing cryptocurrency last month. OnChainFX, a research firm that tabulates cryptoassets metrics and rankings, states that Dogecoin’s valuation jumped by 160 percent in approximately a month. The bulk of Dogecoin’s gains occurred during the last couple days of August and the beginning of September. (See also: Dogecoin Market Valuation Hits $2 Billion; Launched As A Joke Cryptocurrency).
To be precise, the price to buy a single Dogecoin jumped by 150%, from $0.0026 to $0.0065, within three days from Aug. 29 to Sep 1. That increase translated to a skyrocketing of Dogecoin’s valuation from $300 million to $763 million during the same time period. As of this writing, Dogecoin's total market value is $739 million.
Several reasons have been put forward to explain Dogecoin’s price movement. Addition of the cryptocurrency to Robinhood, a stock trading platform for millennials, has been cited as a driving factor to explain the spike. Others opine that the building of a bridge between ethereum, the world’s second most valuable blockchain, and Dogecoin has turned the latter’s investors bullish on its prospects. (See also: The 5 Weirdest Cryptocurrencies).
A Joke Cryptocurrency
Dogecoin was created in 2013 as a parody cryptocurrency by Jackson Palmer, an Australian entrepreneur, and product manager with Adobe. It is among the earliest alt-coins in the network today. Unlike other cryptocurrencies, which have positioned themselves as disruptors of the existing financial ecosystem, Dogecoin professed no such ambitions. It does not have a whitepaper explaining its purpose and technical fundamentals and the coin’s website states that it is the preferred digital currency of Shiba Inus, a Japanese dog breed, worldwide.
In a piece for Motherboard earlier this year, Palmer said speculation might be responsible for Dogecoin’s price increase. “Dogecoin’s valuation is the result of market mania that has resulted in inexperienced investors buying up low-priced assets on a whim, hoping that they will follow Bitcoin’s meteoric trajectory,” he wrote.
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