The cryptocurrency emerged in 2013 as a joke, a meme, but ended up becoming the darling of none other than billionaire Elon Musk about eight years later.
Thanks to the tweets of the Tesla CEO, Dogecoin (DOGE) has gained favor with many investors who have seen its price explode in 2021 from the month of April.
On the first day of that month, DOGE was trading at $0.057. Just over a month later, on May 6, Dogecoin hit its all-time high – which it holds to this day – at $0.73. Therefore, a jump of more than 1,180%.
However, since then, the price of the meme cryptocurrency has dropped more than 84% to the current $0.11.
Also, Musk no longer devotes as much time to the tweets that once inflated the cryptocurrency’s price. Even so, the community around memecoin is still trying to maintain optimism that DOGE could one day rise again.
But will this actually happen? In general, they don’t believe in the long-term fundamentals of DOGE, but there are caveats.
The History of Dogecoin
As mentioned, DOGE was born with the idea of being just a joke, a way of satirizing BTC (BTC).
Its creators are Jackson Palmer and Billy Markus (Shibetoshi Nakamoto). Meanwhile, the cryptocurrency’s “mascot” is the dog of the Shiba Inu breed (which ended up giving the name to another memecoin).
Unlike BTC, Dogecoin comes with an unlimited supply. But, on the other hand, it is a cryptocurrency with more viable use for P2P payments. After all, it has low transaction fees.
The cryptocurrency remained relatively in the shadows until it was mentioned by Elon Musk on Twitter in late 2020. At that time, Musk was on his way to becoming the richest man in the world, and Dogecoin rode on that popularity to achieve success.
In one of his tweets, Elon Musk said that DOGE was “barking at the moon.”
Doge Barking at the Moon pic.twitter.com/QFB81D7zOL
— Elon Musk (@elonmusk) April 15, 2021
DOGE also had the support of another billionaire on his rise, Mark Cuban, owner of the Dallas Mavericks basketball team, who started accepting cryptocurrency as payment last year.
From rise to fall
As Felipe Escudero, host of the BitNada channel, highlighted, Doge has always been the darling coin of crypto enthusiasts. And, until 2020, its main use was to send crypto between exchanges with very low fees.
However, starting in 2021, with the support of Musk and the Wall Streets Bets group, the cryptocurrency gained “a new life”:
“The life of the pump. With this hype, other coins called ‘memes’ were created and encouraged to be part of many people’s investment portfolio. Today, almost a year later, almost no one talks about Dogecoin or the main memecoins anymore because of the abrupt devaluation,” said Escudero.
After the hype and having served as inspiration for the creation of other memecoins such as Shiba Inu, Floki Inu and SafeMoon, sentiment around Doge has cooled. Despite this, DOGE remains, to some extent, globally adopted.
The AMC cinema chain, for example, announced that it now accepts payments in Dogecoin. Ukraine is also accepting cryptocurrency meme as a form of donation.
Is it worth investing in Dogecoin?
So, is it worth taking advantage of the low to invest in Dogecoin?
For Paulo Aragão, crypto expert, although DOGE is in 13th place in terms of market value, with US$ 15.2 billion, this does not make it a serious project:
“Doge is the first memecoin officially. Its low value, low fees and high transaction speed made it used for educational purposes until some time ago. So when you wanted to teach someone how to trade cryptocurrencies, you ended up using Dogecoin. But most of all, for me will always be a memecoin, which makes me not confident to expose myself in the long term.”
As Aragão pointed out, memecoins may even have a significant appreciation at some point. Thus, they can be used for speculation. However, when they depreciate, the fall is very sharp. Also, the difficulty in resuming the previous price is much higher compared to serious projects.
“Whoever wants to invest in Dogecoin, I recommend that you exercise great caution.”