Dogecoin (CCC:DOGE-USD), is a fairly well-known cryptocurrency that has been having a rough time lately. As of July 7, Dogecoin was just above 21 cents per DOGE. It peaked around May 6 at 73.76 cents. This means it is now down 71.5% from its peak. Unfortunately, the crypto may have further to fall.
And it is not as if Dogecoin is not popular. For example, CoinMarketCap.com now ranks it as the seventh-largest cryptocurrency by market capitalization. Its market cap is just under $28 billion, as of July 8 at 21.35 cents per DOGE.
Moreover, it is still well up for the year. It ended last year at a little over one-half of one cent (i.e., 0.5685 cents per DOGE). That means it is still up about 37 times in the space of a little over six months. Of course, most of this performance came during Q1 and the early part of Q2.
Of course, this is a bit strange. Ethereum is the second-largest cryptocurrency. It has a market cap of about $252 billion, almost 10 times greater than Dogecoin. And there are other strange results that fall in Dogecoin’s favor.
According to CoinTelegraph.com, the survey was taken in the U.S. with over 2,000 adults, asking for their thoughts on cryptocurrencies. The survey had some very interesting results. For example, 29% of the people had heard of Dogecoin, but only 21% had heard of Ethereum.
Moreover, of the total 2,063 people in the survey, most (89%) had heard about cryptocurrency. Bitcoin (CCC:BTC-USD) was the most well-known crypto, with Dogecoin coming in second. In fact, 18% of the people had heard about Litecoin (CCC:LTC-USD), and even 10% had heard about Stellar Lumens (CCC:XLM-USD).
The Elon Musk Effect
Of course, much of Dogecoin’s popularity probably stems from Elon Musk and his efforts to promote the crypto. I have written about this in the past, including his funding of various developers to write code to enhance the crypto’s digital path.
Bloomberg magazine recently wrote about Musk’s ability to move the prices of both Bitcoin and Dogecoin. They implied that his influence is much greater than Warren Buffett’s influence on stocks. At the end of May, he was effectively acting as the CEO of the crypto by directing and funding a group of crypto software developers.
Musk has been quiet on Dogecoin recently. At the end of May, he hosted Saturday Night Live and poked fun of Dogecoin, calling it a “hustle.” Since then, he has more or less been quiet on the crypto.
The Coinbase Fiasco
When Coinbase decided to allow the listing of DOGE tokens on its exchange, it also announced a prize windfall of up to $1.2 million. Anyone who bought at least $100 of Dogecoin by June 10 would be eligible. I even fell for that promotion. Since then, my share of $100 in Dogecoin has fallen to just over $60 per DOGE. I wanted to see what all the fuss was about.
That kind of 40% performance drop is not going to endear anyone to the crypto. This was a colossal failure for the popularity of the DOGE crypto.
But interestingly, other companies have picked up this idea. Decrypt.co reported recently that a company behind the blockchain development platform, Blockv, was putting on a “Million Doge Disco” event. They are giving away a million DOGE tokens as part of a game launch. What’s more, a key figure behind the event is Justin Trudeau’s half-brother.
These events are the direct result of Dogecoin’s popularity, or at least its awareness in the public’s mind.
The problem is none of these events or their results will help keep Dogecoin rising. If anything, they will push the crypto further down, since people will tend to sell their prize DOGE tokens. As a result, don’t wait for Dogecoin to rebound anytime soon.
On the date of publication, Mark R. Hake held a long position in Dogecoin, Bitcoin, and Ethereum but not any other security mentioned in the article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.