Dogecoin has surprised many in the crypto world. After all, no one thought a cryptocurrency that started out as a “joke” would explode on Wall Street.
Dogecoin, which is based on the “Doge” meme, is now worth more than $40 billion — its price whooping 400% between April 12 and April 16.
The meme cryptocurrency briefly replaced the payments-focused XRP as the fourth-largest cryptocurrency by market capitalization when prices hit the new high, Yahoo reported.
While some are celebrating, financial experts say Dogecoin’s skyrocketing price is a sign of a speculative bubble in the cryptocurrency market.
“Dogecoin’s rise is a classic example of greater fool theory at play,” David Kimberley, an analyst at U.K.-based investing app Freetrade, told CNBC.
“People are buying the cryptocurrency, not because they think it has any meaningful value, but because they hope others will pile in, push the price up, and then they can sell off and make a quick buck.”
But, Kimberley added, “when everyone is doing this, the bubble eventually has to burst and you’re going to be left short-changed if you don’t get out in time. And it’s almost impossible to say when that’s going to happen.”
Despite this, Dogecoin fans are excited and are trying to turn April 20 into “Doge Day.”
Dogecoiners was to send the cryptocurrency “to the moon,” making its price skyrocket even more through an organized push online, Gizmodo reported.
The cryptocurrency is based on the “Doge” meme, which was popular in late 2013. The meme consisted of a picture of a Shiba Inu dog accompanied by multicolored, humorous text in Comic Sans font in the foreground.
Dogecoin was launched in 2013 by software engineers Billy Markus and Jackson Palmer and was intended as a “fun” alternative to bitcoin. Dogecoin gained a buzz online and grew from there.
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Dogecoin has seen an incredible spike before and like many cryptocurrencies, is prone to explosive swings in price.
Dogecoin has gotten major support from Tesla CEO Elon Musk. He has made several tweets about Dogecoin, which in turn has helped push up its price.
Musk recently posted a cryptic tweet saying “Doge Barking at the Moon,” apparently referring to the popular crypto slang phrase “to the moon.”
The billionaire has called dogecoin his “fav” cryptocurrency and “the people’s crypto.”
