"A joke cryptocurrency has risen more than 26,000% in the last six months, outpacing nearly every other investment"

" \n Dogecoin, the cryptocurrency branded after a viral dog meme from years ago, hit a new all-time high Friday afternoon. It now has a market capitalization of about $92 billion following a six-month climb of more than 26,000 percent. \n \n\n \n Over that same time period, the S&P was up 19 percent, while crypto rivals bitcoin and ether were up 286 percent and 698 percent, respectively, according to CoinMarketCap. And stock market darling Tesla ? It is up 56 percent since November. \n \n\n \n \u201cThe joke is on Wall Street this time,\u201d said Mati Greenspan, portfolio manager and founder of Quantum Economics. \u201cWhat you have is a situation where teens on TikTok are outperforming even the smartest suits by thousands of percentage points.\u201d \n \n\n \n In 2013, software engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency as a way to make fun of bitcoin and the many other cryptocurrencies boasting grand plans to take over the world. \n \n\n \n \n \n\n \n \n \n\n \n They called it dogecoin \u2013 pronounced \u201cdoje coin\u201d with a soft \u201cg\u201d sound \u2013 after the once-popular \u201cdoge\u201d shiba inu meme. Its purpose? To be a faster but \u201cfun\u201d alternative to bitcoin . \n \n\n \n \u201cThe appeal of dogecoin has always been its honesty,\u201d Galaxy\u2019s researchers Alex Thorn and Karim Helmy explained in a note to clients on May 4. \u201cUnlike many other cryptocurrency projects...there\u2019s no grand vision, no pronouncements about how dogecoin will change the world.\u201d \n \n\n \n In addition, while bitcoin has a capped supply of 21 million coins, there is currently no limit to the number of dogecoins that can be created. \n \n\n \n \u201cOne of the value propositions of bitcoin is digital scarcity; that there will only be 21 million,\u201d said Greenspan. \u201cThere is no such hard cap [with dogecoin], and it has a really crazy inflation schedule.\u201d \n \n\n \n The Elon Musk effect \n \n\n \n It isn\u2019t totally clear when or why dogecoin captured the heart of Elon Musk. \n \n\n \n The billionaire Tesla and SpaceX CEO has spent years talking up the token. \n \n\n \n Musk\u2019s tweets with sometimes oblique references to dogecoin often send it to new record-high prices . These posts have also helped drive retail investor interest. \n \n\n \n \u201cYou have this one guy who is sort of like the cult leader,\u201d said Asheesh Birla, a general manager at Ripple, which manages an alternative cryptocurrency used for payments. \n \n\n \n Musk, however, isn\u2019t alone in his celebrity endorsement of the animal-branded token.\u00a0 Dallas Mavericks owner Mark Cuban , Snoop Dogg and Kiss bassist Gene Simmons have all publicly rallied behind dogecoin. Even beef jerky brand\u00a0 Slim Jim is getting in \u00a0on the action. \n \n\n \n Its price surge this week, attributed by one analyst to Elon Musk\u2019s upcoming \u201cSaturday Night Live\u201d appearance on May 8, even managed to briefly crash Robinhood\u2019s trading app . \n \n\n \n But there is more to dogecoin\u2019s record price run than just celebrity backing. \n \n\n \n Market conditions have also been right. Multiple rounds of stimulus checks have meant people have more money on hand to spend. Apps like Robinhood have made it easier than ever for the casual investor to make a bet on stocks, turning day-trading into a pandemic pastime. \n \n\n \n There is also the enduring sentiment to \u201cstick it\u201d to the establishment. \n \n\n \n \u201cDogecoin is like this kind of big F-U to the system,\u201d said Avi Felman, Head of Trading at BlockTower Capital. \u201cIt\u2019s like, \u2018Yeah, this thing can have value, too. And I\u2019m just going to buy it, because I\u2019m going to buy it.\u2019\u201d \n \n\n \n Experts say the dynamic is reminiscent of the GameStop trading frenzy from earlier this year. \n \n\n \n \u201cElon is basically pushing up this message of, \u2018Why can\u2019t dogecoin have value?\u2019\u201d said Felman. \u201cIt\u2019s part of the GameStop boom. People like these narratives. They like these stories. They like these jokes. And dogecoin just captured the mind and imagination of every single retail investor.\u201d \n \n\n \n The rise of commission-free trading through online brokerage apps like Robinhood also made it easier than ever to buy into crypto. \n \n\n \n \u201cYou have a rabid online community,\u201d Birla said of the fanbase of doge evangelists. \u201cYou have Twitter and Reddit, where they\u2019re all sort of congregating and thinking about how to pump dogecoin.\u201d \n \n\n \n Valuing dogecoin \n \n\n \n The question of whether dogecoin holds value is debatable. \n \n\n \n At the moment, there are very few use cases for the token. Though\u00a0more merchants\u00a0are starting to\u00a0 accept dogecoin \u00a0as a method of payment, it is nowhere near the level of adoption necessary to be used as any sort of actual currency substitute.\u00a0 \n \n\n \n \u201cThese days it\u2019s all one big marketing ploy,\u201d said Mike Bucella, BlockTower Capital general partner. \n \n\n \n Unlike rival cryptocurrencies such as ethereum, which let programmers build applications on their platform to do things like lend and borrow money, there isn\u2019t much anyone can do with dogecoin. \n \n\n \n Dogecoin isn\u2019t really a reliable store of wealth either, given that this typically requires a certain degree of long-term faith in the coin and the blockchain upon which it\u2019s been built. \n \n\n \n \u201cIf you look at the dogecoin protocol itself, I don\u2019t even know if there\u2019s anyone over the last several years who has added new functionality or code to it,\u201d said Birla. \u201cDogecoin doesn\u2019t really have a development team behind it.\u201d \n \n\n \n Given these limitations, the run-up in dogecoin appears to be purely speculative. Dogecoin has value because other people believe that it has value. And because they believe that someone else is willing to buy it from them at a higher price. \n \n\n \n \u201cWe see dogecoin rising in price as a factor of low liquidity and extreme growth in the network,\u201d explained Greenspan. \u201cOnce the network does reach critical mass, I don\u2019t think that type of growth is sustainable.\u201d \n \n\n \n But all is not lost for the future of dogecoin. \n \n\n \n \u201cThe real value is in today\u2019s meme-driven culture, and doge represents the network value of memetics, which may prove to be enormous,\u201d explained Bucella. \u201cIf at some point, the doge community decides to implement a burn or new supply mechanism, via a protocol hard fork, then this value will have a higher likelihood of being retained long-term.\u201d \n "

"A joke cryptocurrency has risen more than 26,000% in the last six months, outpacing nearly every other investment"

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