From a fun project to the darling of the crypto scene: Dogecoin has gained a lot in value in the meantime. But how sustainable is the hype? And is it still worth investing in?
The cryptocurrency Dogecoin began as an Internet gag. Then Elon Musk tweeted about it – and sparked a hype that first users of the internet platform “Reddit” and then crypto investors from all over the world jumped on. In May 2021, the Dogecoin price climbed to its previous record high of $0.73.
Dogecoin is one of the ten largest cryptocurrencies in the world in terms of market capitalization. It is currently ranked eighth, but was once ranked fourth in the meantime. Is the cryptocurrency thus a viable alternative to crypto market giants such as Bitcoin and Ethereum? The most important questions and answers.
What is Dogecoin (DOGE) and who is behind it?
Dogecoin was initially nothing more than a little fun by an Australian programmer. Billy Markus, who worked professionally in the marketing department of the software manufacturer Adobe, wanted to use the cryptocurrency to parody Bitcoin and other virtual goods that were experiencing hype on the web at the time. Jackson Palmer, a programmer from the US state of Oregon, helped with the technical implementation. On December 6, 2013, the two introduced their fun currency in an online forum. The name and look of Dogecoin are based on a popular Internet joke (“meme”) featuring a dog of the Japanese Shiba breed. “Doge” is a deliberate variation of the English word “dog.”
How has the Dogecoin exchange rate evolved?
“Dogecoin is like Bitcoin – only as good as worthless,” headlined the American website “Digitaltrends” in December 2013, shortly after the fun currency was launched. A user on the Internet forum “Bitcointalk” joked, “Dogecoin is bound to become very valuable again.”
Indeed, Dogecoin quickly found greater traction than its creators had anticipated. Over one million Internet users visited the fun currency’s website in its first month of existence. Users on Internet platforms such as “Twitch” or “Reddit” increasingly used Dogecoin for so-called “tips”, i.e. small tokens of appreciation for useful contributions by other users. However, Dogecoin still does not want to seriously compete with Bitcoin, co-inventor Jackson Palmer told the US portal “Insider” at the time. “Dogecoin doesn’t take itself as seriously as Bitcoin,” Palmer said. “It is not used by people who want to get rich with it.”
In 2018, Dogecoin’s market value surpassed the two-billion-dollar mark. Still, Dogecoin remained a niche digital asset. For five years, the cryptocurrency’s price remained below one cent – and also quickly returned to those realms after a brief high in January 2018 (1.4 cents).
Then, in December 2020, came a momentous Twitter post from Elon Musk. “One word: Doge,” the Tesla CEO wrote on Dec. 21, 2020, in a Twitter exchange with American bitcoin investor Michael Saylor. The cryptocurrency’s price then shot up 200 percent within a few days.