The rollercoaster ride for bedroom traders has continued into February with Dogecoin, the cryptocurrency started as a joke, surging following a flurry of supportive tweets from Elon Musk, Tesla founder and the world’s richest man.
The cryptocurrency soared 64pc in just 24 hours to 3.8p per coin after Mr Musk followed a one-word tweet, “Doge”, by labelling the coins “the people’s crypto” and tweeting “No highs, no lows, only Doge”. It has held on to most of its gains and now trades at 3.3p.
Dogecoin became the focus of Reddit users in early February, when users turned their attention to cryptocurrency after driving a stratospheric rise in the shares of American video games retailer GameStop which has since dramatically unwound.
The crytpocurrency had climbed 900 per cent after the Reddit’s SatoshiStreetBets forum of crypto-enthusiasts called for the coin to hit $1. After hitting a peak of 5.7p per coin, Dogecoin fell back sharply.
But what exactly is Dogecoin? And how can investors get hold of some?
What is it?
Dogecoin is a cryptocurrency, like Bitcoin, but far less influential. According to Coinbase, a cryptocurrency exchange, it was created as a joke and is a reference to a popular internet meme.
Founded in 2013 by former Adobe and IBM software engineers, it has a market value of £7.3bn compared with Bitcoin’s £520bn. Unlike Bitcoin there is no hard limit on the amount of coins that will exist.
Its low price per coin contrasts with Bitcoin’s more established reputation and high cost of over £25,000 per coin.
Why is it surging?
From relative obscurity, Dogecoin is now a hot asset among cryptocurrency fans and punters looking to make money fast.
Its rise in value is not down to a belief the coins will become a widely adopted cryptocurrency, but due to Reddit users’ campaign and those looking to profit from it. Unlike GameStop, there are no hedge funds on the other side of the trade harmed by its rise.
Dogecoin is also popular because it references a long-running internet joke, and its rise in prominence is seen as entertainment by some of its internet fans, who refer to themselves as the “dogearmy”. Tweets from Mr Musk have supercharged its rise.