Dogecoin price has notably plummeted post its brief and spirited market rally. Reasons for this could be the instability in Silicon Valley arising from issues like the banning of certain content on Instagram.
The coin was initially introduced in 2013, inspired from an internet meme about a grammatically challenged Shibu – Inu dog. Initially developed as a Bitcoin spin-off, Dogecoin soon turned into a gag.
It was very recently when the meme cryptocurrency gained momentum due to a TikTok video titled “Let’s all get rich” posted by a user – James Galante. Galante put up two videos, with 250,000, and 900,000 viewers respectively promoting Dogecoin. The price almost doubled in a week post July 6′ 2020, rising from $0.00448 to $0.0023. Galante’s video motivated approximately ten million other videos on TikTok with the hashtag “Dogecoin” or “Dogecoinchallenge”.
The irony is that the creator of Dogecoin – Jackson Palmer tweeted about the absurdity of digital currency, and abandoned their trademark in 2015 when feared that people were taking Dogecoin too seriously and can incur huge losses.
PUMP to ?
While tech giant owners, like Tesla’s Elon Musk called Dogecoin “an interesting cryptocurrency”, its fall is far from unprecedented. In fact, a number of crypto traders have acknowledged, “Look, we all know this (Dogecoin) will collapse eventually, but you will be one of the winners who rakes in the cash, while only the later entrants will lose money.” Authenticating the conjectures regarding Dogecoin, its price started falling only two days ago. The stock rate descended from $0.0052 to $0.0036.
Nonetheless, the traction and investments witnessed by Dogecoin present a striking pattern. For all that we know, attracting such a massive number of investors through TikTok depicts another undiscovered usage of contemporary social media, particularly video applications. At its peak, Dogecoin observed massive investments on stock trading applications, like Robinhood, by young adults. It can be speculated that the investments promised people laid-off and furloughed, due to the pandemic, an opportunity to fight their economic downslide.
While Dogecoin prices were destined to fall, Galante has surely initiated a novel trend of promoting stock investments through video applications, like TikTok. The raging question is, will this trend involve laypersons into the complex web of investments within cryptocurrency?
What's Wrong With Dogecoin?
Dogecoin does not have a cap on its supply in the market. This is not only an indication of inflation, but also reduces the worth of a currency.
According to Fortune Magazine, “there were 18 million Bitcoins on the market out of a total possible 21 million Bitcoins at press time. Six-and-a-quarter Bitcoins enter the market every 10 minutes or so, a rate that is programmed to halve every four years until the last Bitcoins are “mined” in the year 2140.”