Dogecoin, a cryptocurrency that started as a joke and which also happens to be one of Elon Musk’s favourites, shot up on Wednesday.
At the time of writing, it is up around 30%, sitting at around $0.408.
It’s not the first time dogecoin has jumped this year. The meme cryptocurrency has been on a tear and is up by around 9,000% since the start of the year alone.
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So what’s going?
It seems that the culprit for once is not a Musk tweet (well, not just a Musk tweet), but the imminent listing of dogecoin on the Coinbase Pro exchange.
Dogecoin was already listed on Coinbase. But the pro listing paves the way for traders to buy dogecoin on America’s largest cryptocurrency exchange from 3 June if “liquidity conditions are met”, the exchange said.
Coinbase, America’s largest cryptocurrency exchange, went public in April and is split into two parts. Coinbase acts as a cryptocurrency wallet and brokerage service, while Coinbase Pro is an exchange for advanced users which enables them to buy and sell cryptocurrencies across trading pairs (in other words you can play the bitcoin/ether exchange rate, say), and also gives them access to many other types of cryptocurrencies.
Elon Musk – the Jerome Powell of crypto?
Musk of course took to Twitter to celebrate the news of doge being added to Coinbase Pro and retweeted a picture showing dogecoin taking over the global financial system, later adding the word “inevitable.”
Dogecoin was created in 2013 by software engineers Jackson Palmer and Billy Markus. It is based on the popular internet “meme” of a Japanese type of dog, the Shiba Inu.
While it started out as a joke, the cryptocurrency currently has a higher value than many other relatively “stronger” cryptocurrency projects. At the time of writing, dogecoin’s total value is just shy of $55bn, according to CoinMarketCap.
Dogecoin is not alone. Wednesday’s bullish optimism for the dogecoin spread to other cryptocurrencies. Ether, the world’s second largest cryptocurrency by value after bitcoin, rose 7%, meanwhile bitcoin was up 3% and cardano rose 4%.
However, doge is still trading well below its all-time high of $0.68 it traded at in May. And investors can be forgiven for taking any of Musk’s comments with a pinch of salt, especially given the Tesla chief executive’s recent U-turn on the idea of accepting bitcoin as payment for Teslas, despite buying around $1.5bn worth of bitcoin earlier in the year.
Musk has started to gain a reputation as the “Fed of the crypto world”. But the fact that the cryptocurrency market can so easily be moved by Tweets from a single (and somewhat capricious) CEO really just shows how volatile the market itself is.
In the case of dogecoin in particular, it’s hard to work out what the appeal is. There’s the fact that it was founded as a joke, for a start, and that unlike bitcoin, it technically has an unlimited supply.
As the project’s co-founder Markus said earlier in the year, if anything, the cryptocurrency’s gains are a good “barometer” for how disconnected the cryptocurrency is from reality.
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