Dogecoin, the cryptocurrency created as a spoof, is turning out to be increasingly valuable – for now.
The price of Dogecoin jumped above 30 cents as of Friday to a record high, according to the digital currency exchange Coinbase. That’s more than double its value Wednesday, when Dogecoin (pronounced “doh-j”) hit 13 cents. Late Friday, it traded at about 34 cents after reaching as high as 45 cents.
Dogecoin has soared more than 400% in the past week and skyrocketed by more than 5,000% since the start of the year. Dogecoin’s market value now sits at nearly $45 billion, according to CoinGecko, a crypto market data site.
The “memecoin” was created in 2013 as a joke poking fun at the surge in digital coins such as bitcoin, says cryptocurrency news site Coindesk. Dogecoin was inspired by the popular Doge meme, which offers the image of a Shiba Inu staring sideways at the camera with raised eyebrows, According to the website Know Your Meme.
The surge in popularity for “memecoins” like Dogecoin follows a recent boom in retail trading during the coronavirus pandemic as more people worked online, spurring interest in “meme stocks” like GameStop.
The videogame retailer took Wall Street by storm in January after a group of small-pocketed investors on Reddit sparked a historic short squeeze where they drove up the stock prices for shares like GameStop, AMC and several other stocks.
Interest in the cryptocurrency jumped in the past week as Coinbase, which started publicly trading in a blockbuster debut on the Nasdaq exchange on Wednesday, propelled further interest in digital assets.
It was viewed as a landmark event for the cryptocurrency industry. Coinbase, which was briefly worth as much as $100 billion in its debut, ended its first day with a share price of $328.28 and a market value of $85.78 billion.
The listing has drawn renewed focus to cryptocurrencies, with the most highly traded ones such as bitcoin and ether trading at all-time highs. On Thursday, bitcoin eclipsed $64,000 and ether briefly topped $2,500 for the first time Friday.
But the Coinbase listing has also attracted new retail traders to smaller and cheaper coins like Dogecoin. In fact, the rally in Dogecoin came even though Coinbase isn’t offering to trade it.
Dogecoin has ridden a similar Reddit-driven wave as stocks like GameStop and AMC in recent months, accelerated by a series of tweets by tech billionaire Elon Musk, who was pumping the cryptocurrency.
The latest rise in Dogecoin comes after the Tesla CEO said “Doge Barking at the moon” in a tweet on Thursday. He also shared a photo of a painting titled “Dog Barking at the Moon” by Spanish artist Joan Miró.
Musk, who has more than 51 million followers on Twitter, has driven traders into frenzies by mentioning Dogecoin at times. In February, a series of tweets by the tech billionaire had briefly sent dogecoin up more than 50%. “Dogecoin is the people’s crypto,” he tweeted at the time.
To be sure, the sharp rise in Dogecoin has led to worries of a bubble in the cryptocurrency market, some analysts warn.
Bitcoin, which has more than doubled since the start of 2021, is viewed as a speculative bubble for some investors. About 74% of those surveyed in Bank of America’s latest global fund managers’ report said the world’s most popular digital coin is a bubble.
Earlier this year, Dogecoin soared following enthusiasm from a Reddit group called r/SatoshiStreetBets, which aims to pump up the prices of cryptocurrencies.
The group is similar to r/WallStreetBets, which helped fuel a rally in GameStop shares in January. The r/WallStreetBets Reddit community took Wall Street by storm earlier this year, spurring a fight in the markets between amateur and hedge fund investors over stocks like GameStop and AMC.
The r/WallStreetBets Reddit forum, which has long banned cryptocurrency discussion, briefly lifted the ban this week on bitcoin, ether and Dogecoin with a daily discussion thread. But on Thursday, the ban was reinstated.
Robinhood suffered a “major outage” in the midst of Dogecoin’s rally, angering many retail investors. On Thursday, the online brokerage said it faced “unprecedented demand” on its crypto trading feature.
After fixing the issue, it briefly suffered trading problems again Friday morning, but Robinhood said on Twitter that the feature was now back online.