Last month, Dogecoin, a cryptocurrency that began as a joke, was the best-performing cryptocurrency. Dogecoin’s value increased by 160 percent in about a month, according to OnChainFX, a research business that tabulates cryptoasset metrics and rankings. The majority of Dogecoin’s gains occurred in the latter days of August and the first few days of September.
From August 29 to September 1, the price of a single Dogecoin rose by 150 percent, from $0.0026 to $0.0065, in just three days. During the same time span, Dogecoin’s value skyrocketed from $300 million to $763 million. The total market value of Dogecoin is $739 million as of this writing.
The price volatility of Dogecoin has been attributed to a number of factors. The cryptocurrency’s inclusion in Robinhood, a stock trading platform for millennials, has been mentioned as a driving reason in the price increase. Others believe that the construction of a bridge between ethereum, the world’s second most valuable blockchain, and Dogecoin has made investors optimistic about the latter’s prospects.
Cryptocurrency is a joke
Jackson Palmer, an Australian entrepreneur and Adobe product manager, founded Dogecoin in 2013 as a satirical cryptocurrency. It is one among the first alt-coins on the network. Unlike other cryptocurrencies that have positioned themselves as challengers of the existing financial system, Dogecoin has stated that it has no such plans. The coin’s website claims that it is the favorite digital money of Shiba Inus, a Japanese dog breed, around the world, however there is no whitepaper describing its purpose or technological principles.
Palmer speculated in a column for Motherboard earlier this year that Dogecoin’s price spike could be due to speculation. “Dogecoin’s pricing is the outcome of market hysteria,” he wrote, “which has resulted in novice investors buying low-priced assets on the spur of the moment in the hopes that they will follow Bitcoin’s meteoric trajectory.”