In the second quarter of 2021, clients held more dogecoin — the meme token that was started as a joke — than bitcoin or ethereum, the two largest cryptocurrencies by market capitalization, while cardano ranked No. 1 coin in Q1 and Q2, according to a June snapshot from crypto brokerage company eToro.
Bitcoin held the No. 5 spot for the second quarter, falling in rank from No. 2 in Q1. Ether ranked No. 4 in the second quarter, down from third place in Q1.
Dogecoin has only been listed on the Israeli brokerage and social trading firm eToro since May. eToro CEO Yoni Assia told Business Insider that he had reservations at first about doge — it didn’t feel “sensible” to list the shiba inu-themed token due to its background, he said. Other crypto exchanges added dogecoin this year including Coinbase and Gemini.
Sam Bankman-Fried, the billionaire founder of crypto exchange FTX, named doge “asset of the year.” Trading platform Robinhood reported in an S-1 filing for its upcoming IPO that it generated close to $30 million in revenue from customers trading dogecoin in Q1.
Altcoins such as doge have risen in popularity as bitcoin’s share of the total crypto market drops below 50 percent for the first time in three years. The bitcoin market cap stands at 43.9 percent, according to data from CoinGecko.
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By comparison, Dogecoin’s market cap dominance is at 1.88 percent as of this writing, according to Coingecko.
Dogecoin started as a joke in 2013 but has seen a breakneck rally in 2021, thanks in part to the support of billionaires Elon Musk, CEO of Tesla, and TV personality-investor Mark Cuban.
Musk, who has been described as the second-largest institutional holder of bitcoin, moved markets when he did a U-turn on bitcoin. Musk tweeted in May that he would no longer accept bitcoin as payment for Tesla’s electric vehicles due to concerns over the environmental impact of bitcoin’s energy-intensive mining process.
Musk has warned about limitations he sees in bitcoin and ethereum, declaring them “slow” and with high costs. In May, Musk proposed a dogecoin upgrade that he claimed is “needed (for dogecoin) to become the currency of Earth” and beat bitcoin “hands down.”
Dogecoin investor and YouTuber Matt Wallace claimed “the dogecoin update is coming soon” that “will position doge perfectly to become one of the most used currencies in the world.”
Tesla continues to hold more than $1 billion worth of bitcoin purchased near the beginning of 2021 — an investment now thought to be underwater. Musk has also indicated he personally holds dogecoin, Forbes reported.
One criticism often leveled against dogecoin is that it has a circulating supply of about 130 billion coins compared to bitcoin’s 18.74 million coins. The doge supply increases by about 5 billion per year, Benzinga reported. The increasing supply changes doge’s utility “from store of value to potentially a digital currency” Musk said. “It’s the fact that they create (5 billion a year) that keeps the per coin price low, which makes it more accessible.”
Some have criticized dogecoin over its lack of development, pointing to its Github page, which has not seen much action since 2017. Ethereum co-founder Vitalik Buterin said that there are “subtle technical factors” that limit dogecoin scaling. Musk himself attracted criticism when he moved markets by saying he was working with Dogecoin developers on “system transaction efficiency”