Bitcoin and cryptocurrency mania is well and truly back and celebrities are jumping on the cryptocurrency bandwagon with the same abandon they did in the heady days of 2017.
While the bitcoin price has soared around 500% since this time last year, smaller cryptocurrencies are far outpacing bitcoin.
Dogecoin, the meme-based cryptocurrency originally created as a joke, is leading the pack, rocketing a blistering 20,000% over the last 12 months—with analysis revealing that three stimulus checks, worth just over $3,000, would now be worth an eye-popping $500,000 if they’d be used to buy dogecoin.
“Putting all three U.S. stimulus checks into dogecoin now exceeds $500,000,” personal finance blogger Nick Maggiulli said via Twitter this week. For comparison, if stimulus check recipients had put their cash into bitcoin it would be worth around $15,000.
“While there are several Twitter accounts regularly tracking what would have happened if you had put your stimulus money into bitcoin, there were, until now, no dogecoin equivalents—and for good reason,” says Quantum Economics bitcoin analyst Jason Deane, speaking via Telegram.
“Dogecoin has never been positioned as a serious currency—it was literally created as a meme—and no serious investors have ever regarded it as such due to the enormous risk factors associated with a small-cap currency that has not seen any development since 2019. However, such is the power of markets, memes and high profile (albeit tongue-in-cheek) supporters, it’s now possible that dogecoin many now have as much longevity as bitcoin—just for entirely different reasons.”
This week, a Galaxy Digital Research report found dogecoin has “remarkably strong fundamentals”—and warned dogecoin “should not be ignored.”
In March, a survey found around 10% of stimulus check funds—nearly $40 billion of the $380 billion in direct stimulus check deposits—may have been used to buy bitcoin and stocks, with stimulus check recipients found to prefer bitcoin.
The dogecoin price has ballooned since traders and investors began pouring cash into it in January this year, with the memecoin boosted by retail traders that have enthusiastically embraced cryptocurrency trading via the likes of Robinhood, a commission-free trading app.
Robinhood, which added support for bitcoin and a handful of cryptocurrencies, including dogecoin, in February, buckled under the weight of dogecoin trades this week for the second time in a matter of weeks as Tesla billionaire and dogecoin devotee Elon Musk whipped the market into a frenzy ahead of his closely watched appearance on Saturday Night Live this weekend. Meanwhile, market data provider TradingView has reported its dogecoin page views have climbed by around 350% in recent weeks.
However, amid bitcoin, dogecoin and wider cryptocurrency price mania, many are calling for calm and warning people not to speculate with money they can’t afford to lose.
“We’re clearly now in the mania phase of the crypto bull market,” says Glen Goodman, a market trading veteran and author of The Crypto Trader.
“Friends who’ve never invested in their lives are now asking me how to buy scam coins through obscure ‘exchanges’ that have sprung up overnight. A friend’s 90-year-old uncle just gave her a chunk of cash on the condition that she use it to buy bitcoin. These are the wild times. Enjoy them while they last and, for goodness sake, only invest what you can afford to lose.”