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Dogecoin, or DOGE, a joke or meme based on the world’s oldest cryptocurrency, Bitcoin, soared seven times in 24 hours to reach a market capitalization of $7 billion. The crypto asset could make the top 100 Indian companies list at this price, beating out companies like Bandhan Bank, Lupin, and Cadila Healthcare.
DOGE’s meteoric rise has launched it into the top ten cryptocurrencies in the world. With a market capitalization of nearly $600 billion, Bitcoin is the most valuable crypto asset on the planet. TCS Ltd, India’s most valuable stock, had a market capitalization of $165 billion as of Thursday’s close.
According to data from cryptocurrency tracker CoinGecko, DOGE was trading at $0.051881, up 357.1 percent at about 2.15 pm (IST).
“Dogecoin is a legal cryptocurrency with its blockchain, but it was made more as a prank than as a functional currency. It’s also known as a meme currency because it mocks all other currencies,” said Ashish Singhal, CEO, and co-founder of CoinSwitch Kuber, a cryptocurrency investment site.
The spike in DOGE came on the back of frenzied speculative trading by retail investors after the cryptocurrency received attention from several Reddit message board users.
Earlier, GameStop’s shares also had seen a massive rally due to related exposure on social media and chat rooms, like GameStop.
“The GameStop value has shifted as a result of the Reddit thread. Over the last two days, the same thing happened with Dogecoin, with a slew of memes being made, including by well-known figures like Elon Musk on Twitter. This piqued people’s interest in cryptocurrencies, which led to retail investors flocking to it,” Singhal explained.
Industry experts, on the other hand, have a word of warning.
“This rally is not a joke because someone is profiting and someone is losing money. The rise in Dogecoin, on the other hand, is unjustified. Many people believe in the power of momentum. “Ajeet Khurana, the founder of Genezis Network, a think tank for crypto startup investments, said, “I don’t put stock in the Dogecoin movement except for people who are looking for bargain hunting purely based; on price.”
Singhal echoed similar sentiments, predicting that the rally would fizzle out. “The rise is simply due to the speculation that has been generated, which is not long-term sustainable. When comparing it to GameStop, he says, “the stock should be valued on what the business delivers, not on anyone trying to beat the Wall Street shorts.”
There are also concerns that such an out-of-the-blue rally in Dogecoin could delegitimize the crypto market. Singhal, on the other hand, dismissed such concerns.
“This is in part positive and bad for the crypto industry. Good because many people are talking about it and poor because it is happening for the wrong reasons. “However, I don’t see it as delegitimizing the crypto industry,” Singhal said. “However, a coin going too big without providing value is counterproductive.”
Experts caution that investing in cryptocurrencies is extremely dangerous and that anyone considering doing so should have a thorough understanding of how the business operates and its risk profile. Beginners should avoid lower-tier cryptocurrencies, which have low trading volume and market capitalization.
Bitcoin was back to winning ways in other cryptocurrencies. The cryptocurrency has been steadily rising in price, from $32,107 to $34,326 at writing. Similarly, the cost of ethereum increased from $1,234.10 to $1368.70.
“Today, digital penetration is expanding rapidly, and we are looking beyond tier 1 cities,” said Neeraj Khandelwal, co-founder of CoinDCX, when asked about budget expectations.
Concessions for improving skills, imparting education, and building infrastructure in this field, similar to the white or green revolutions, will help fuel the fintech revolution’s growth in India. The entire group supports taxes, but more transparency and a decrease from the current 18 percent would be beneficial. This will encourage people to trade while also allowing them to make informed decisions. Apart from that, the industry will undoubtedly increase government revenue.”