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Dogecoin was launched in 2013 as a “joke” cryptocurrency by its creators Billy Markus and Jackson Palmer, who were software engineers at the time. Dogecoin was simply a way of making fun of the forecasts by other cryptocurrencies that they would take over FIAT currencies. At the time, it was never intended to be a rival, and flatlined for most of its existence, spiking only when other cryptocurrencies did so.
Pandemic pastime
All cryptocurrencies have increased in popularity over the last year. Due to national and international restrictions of movement, many activities have moved online with punters choosing their best casino site from hundreds currently available. With additional government support and money saved from a work commute, more individuals have had money to spend online, with day-trading another pandemic pastime.
Celebrity endorsement
Bitcoin has a capped supply of 21 million coins, with the idea that scarcity would increase its value. No limit has yet been set on the final number of dogecoins to be created. but its value has risen sharply over time thanks to celebrity endorsements, most significantly Elon Musk, CEO of Tesla and SpaceX, who has speculated on dogecoin, leading to investor interest and record-high prices.
The most significant change in Dogecoin’s history happened in January 2021 when retail traders switched to cryptocurrencies after GameStop restrictions. The value of Dogecoin increased by more than 600 per cent, from USD0.005 at the beginning of the year to USD0.739 thanks to online forums and particularly Elon Musk. In May 2021, Musk’s television appearance on “Saturday Night Live” saw him argue that Dogecoin can have value despite what “the establishment” had been saying. At the time, his company Tesla let buyers pay for an electric car with Bitcoin but not Dogecoin.
Commission-free trading
Some online brokerage apps began offering commission-free trading that makes it easier than ever before to invest in cryptocurrencies, with the support of large investor communities working together on Reddit and Twitter to increase and hold the value of dogecoin.
Fall of Dogecoin
Since May 2021, Musk has been silent on the topic of Dogecoin. From an all-time high on 8 May, the currency fell harder and faster than most of its peers, losing 74 per cent of its value while Bitcoin and Ethereum are down 50 per cent and 56 per cent respectively up to the end of June, in what was a USD1 trillion loss in the combined market of all cryptocurrencies.
There are not many merchants that accept dogecoin as a method of payment. Whilst adoption of the currency is growing, it is still very slow and nowhere close to being considered a substitute currency since programmers are unable to build applications for lending or borrowing and there appears to be no development team behind it. Taken together, all this means Dogecoin cannot offer a reliable future and that any investment is speculation, simply the belief that another is willing to buy the currency from the currency holder at a higher price.
Gamble with Dogecoin
Any growth in Dogecoin was never going to be sustainable due to weak network security, minimal development but most importantly its ever-increasing supply. About 15m coins are being minted every day with 130 billion already in circulation. However, the doge community could apply a new supply mechanism which could retain a higher value over the long term.
Dogecoin is short-term speculation, which some would say is synonymous with a gamble. For those that do not understand the difference between Dogecoin and Bitcoin concerning long term potential, any complaints about losing money will elicit little sympathy. Gambling with dogecoin in the hope of a profit can be an entertaining pastime if investors fully appreciate that they have a chance of losing.
