Dogecoin, a cryptocurrency born out of a light-hearted joke in 2013 with no revolutionary endeavours, such as those of Bitcoin creator, has soared 5,500 per cent in 2021 so far, despite having nearly halved its value over the past week.
Simply put, Dogecoin is an Internet meme currency with the symbol of the Japanese Shiba Inu dog for the meme generation, backed by individuals like Elon Musk, the founder of Tesla, SpaceX and Starlink.
And, Indians are intrigued.
The popularity of the meme cryptocurrency has been soaring among Indians since the beginning of April from virtually zero interest prior to that. Much of the interest has been driven by reports that pegged the digital currency’s returns at over 10,000 per cent year to date, something unheard of in the world of traditional investing.
More Indians were searching for the term ‘Dogecoin’ on Google on Friday than Bitcoin and mutual funds combined, data on Google search trends showed. The rise in popularity of the cryptocurrency has been such that it is threatening to overtake popular search terms in India’s investing landscape like ‘Nifty’ and ‘Sensex’.
Industry watchers in India said almost all of the interest in Doogecoin is being driven by young investors, who are ardent admirers of Elon Musk, given his image as a futurist and his involvement in the development of some of the most revolutionary companies of the 21st century.
The surge in interest is despite Dogecoin giving up almost half of its value earlier this week following the Tesla Founder’s comments on a popular US comedy show that the cryptocurrency was nothing more than a ‘hustle’, confirming the suspicion of most.
Prior to Musk’s appearance on the Saturday Night Live last week, the interest in Dogecoin virtually broke the roof for the cryptocurrency market, as several cryptocurrency exchanges in India such as WazirX were unable to handle the deluge of orders.
WazirX, India’s largest cryptocurrency exchange, reported one of the highest single-day trading volumes of $350 million on May 7, a day prior to Musk’s appearance on the show. Some industry watchers suggested that much of the volumes were being driven by Dogecoin investors.
Musk has tried to make amends ever since his SNL gaffe by announcing the launch of a moon mission called DOGE-1, which will be funded entirely by Dogecoin.
Further, his Twitter poll earlier this week on whether Tesla should accept payment in Dogecoin or Bitcoin coincided with the shock announcement on Thursday that the electric vehicle company will suspend acceptance of Bitcoin as payment due to environment-related concerns.
“…if Elon Musk is able to improve some of its technical flaws as he said, that could help it gain long-term value,” said Vikram Rangala, chief operating officer at ZebPay.
Dogecoin’s lack of fundamental value compared with other major crypto assets such as Bitcoin and Ethereum is not lost even on cryptocurrency experts, who argue that it has none of the traits such as fixed supply that have made Bitcoin popular.
However, when the world’s second richest man is himself on the driver’s seat, one can only expect people to hop on to the bandwagon.