Dogecoin is a name that you’ve most likely heard, even if you aren’t really invested in cryptocurrencies. Elon Musk, easily the most outspoken tech entrepreneur (and human being, in general), has put in a pretty regular night shift, pushing Dogecoin upward in its price trajectory. Later tonight, Musk is expected to host Saturday Night Live, where one of the things that he’s expected to talk about are cryptocurrencies – and Dogecoin specifically. The question, though, is this – is this for real?
Started as a joke
Dogecoin, named after the affectionate internet meme slang for dogs, was started as a “fun” alternative to Bitcoin by two software engineers, Billy Markus and Jackson Palmer. Without any specific commercial application at hand, Dogecoin was simply meant to be a casual crypto coin that stood more as an ideological instrument for decentralised digital currencies against the formal fiat ones.
That is what it remained to be for the longest time, until Tesla and SpaceX chief Elon Musk sent out word on his Twitter profile, urging users to buy Dogecoin. Known for his fairly controversial opinions on a lot of topics, Musk’s tweet wasn’t a solitary one. Since then, he’s offered a fairly regular commentary on it. Labelling it as “people’s crypto”, Musk has largely remained bullish on the prospect of Dogecoin one day becoming a “real currency”.
In recent times, it is this that Doge appears to be proving true.
Bigger than many companies
Today, Dogecoin’s market capitalisation value stands close to $91 billion. In comparative terms, Dogecoin has a bigger market cap than companies such as Uber, General Motors, FedEx, Snap and BNP Paribas. For a cryptocurrency that was billed as just a joke, Dogecoin today stands at a point where it cannot really be termed as a casual, “fun” iteration of cryptocurrencies any longer.
It is this that has led many crypto traditionalists and conservatives to state that Dogecoin is highly overvalued and largely speculative. As a result, many crypto indices, trading firms and asset management companies have chosen to give Dogecoin a complete miss. The reason is fairly simple – most digital currency investors believe that Dogecoin is too speculative and does not have any stop loss margins. At the same time, though, some more progressive ones have taken to offering Dogecoin as a valid digital currency for trading.
Even there, despite its 80x surge taking its price all the way up to Rs 50, the worries of its inflated valuation remain.
Volatility vs optimism
Can Musk’s optimism pull Dogecoin to greater heights, in turn making it a “serious” cryptocurrency? While more can be expected from Musk’s session later tonight, what does remain is an undeniable point that even after its record rally, Dogecoin remains a sketchy option at best. It still has very little to offer apart from inflated optimism pushing its value up. Without any major holding from retail investors, such a bubble can burst any time, hence bringing Dogecoin’s value down at any point.
While the likes of Bitcoin, Ethereum and even the recently premiered Chia appear to have aspects that can give some form of stability to contribute to retail investment and mainstream usage, whether Dogecoin would ever reach that point remains to be seen. The sceptics, though, will outnumber the optimists with this one.