Dogecoin Rallies on Prospect of Coinbase Trading Debut -- Update
June 02 2021 - 7:58AM
Dow Jones News
By Caitlin Ostroff
Dogecoin got a new lease on life Wednesday, with the price
rallying sharply after Coinbase Global Inc. said it would allow
users to trade the joke cryptocurrency on a platform that is geared
toward more experienced investors. Fresh tweets from Tesla CEO Elon
Musk also provided a fresh catalyst.
The price of dogecoin jumped 22% from its Tuesday 5 p.m. ET
level to trade near 42 U.S. cents, its highest in about two weeks,
according to CoinDesk. That gives the cryptocurrency, which was
designed to serve no real purpose, a market value of about $54
billion. Still, it has lost almost half its value from its May
peak.
The debut on Coinbase Pro means users of the hugely popular
cryptocurrency exchange can now trade dogecoin for the first time
by signing up for its free professional platform, which offers
advanced charting and analytical tools. It provides an alternative
to platforms available from Robinhood Markets Inc., Bittrex Global
GmbH and Payward Inc.'s Kraken.
Individual investors have been clamoring online this year for
Coinbase to start supporting the cryptocurrency as a manic rally
spurred the prices of an array of digital assets including bitcoin,
ether, SafeMoon and dogecoin to unprecedented heights. Coinbase
tapped into the frenzied rush for cryptocurrency trading by listing
its own shares in April, a move that spurred bitcoin prices to a
record $64,802.
Dogecoin has soared in popularity this year despite starting out
as a satirical homage to bitcoin in 2013, meant by its founders to
mock the craze for cryptocurrencies at that time. Underscoring how
ridiculous it was meant to be, they set it up so that there is no
limit to how many dogecoin can be generated, unlike the finite
number of bitcoin that can ever exist. Dogecoin miners operating
fast-running computers can unlock new tokens by solving complex
mathematical puzzles.
Dogecoin's price has tumbled since early May, when Mr. Musk
called it "a hustle" on a "Saturday Night Live" episode. That took
many investors by surprise: Tweets by Mr. Musk that seemed to
promote the cryptocurrency had drawn attention to dogecoin and
helped fuel its almost 9,000% rally this year.
After Coinbase said Tuesday that it would support dogecoin
trading, Mr. Musk reshared a July 2020 meme showing the
cryptocurrency subsuming the global financial system, with the
comment, "It's inevitable." He also suggested that he planned to
adopt a Shiba Inu -- the Japanese dog breed that inspired the doge
meme and dogecoin -- later this year.
His support of cryptocurrencies has won him fans in the
community, especially with dogecoin supporters who have cheered it
"to the moon," but also sparked backlash when his comments led to
steep losses for individual investors.
Mr. Musk's prolific tweeting has also irked officials at the
Securities and Exchange Commission, as it can move Tesla's stock.
Securities regulators told the electric-vehicle company last year
that Mr. Musk's use of Twitter had twice violated a court-ordered
policy requiring his tweets to be preapproved by company lawyers,
according to records obtained by The Wall Street Journal.
Mr. Musk's comments can frequently range far beyond Tesla and
cryptocurrencies, and hold sway over other corners of the market
too. On Wednesday, shares of Samsung Publishing Co. Ltd., which
owns a stake in the producer of "Baby Shark," climbed over 6% in
South Korean trading after Mr. Musk tweeted the viral children's
song with a note saying, "Baby Shark crushes all! More views than
humans."
Trading in dogecoin could begin on Coinbase at noon ET on
Thursday, the company said. But that is if customers transfer their
holdings of the token to Coinbase Pro to generate ample ability to
buy or sell the asset.
For now, dogecoin won't be available on Coinbase's general
investment platform, which has a simpler interface, is aimed at
newer investors and offers fewer trading options.
Gains in other cryptocurrencies were more muted on Wednesday,
with bitcoin up 2.8% from its 5 p.m. ET Tuesday level to
$37,358.68, while ether rose 4.7%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
June 02, 2021 07:52 ET (11:52 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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