Tuesday (April 20) was supposed to be a red-letter day of sorts for Dogecoin, the cryptocurrency that has its roots as an internet sensation – chiefly as a joke – and has grown to be a phenomenon.
You know the one – with the dog sort of looking askance. It started off as a wink and a nod to the rise of cryptos in general back in 2013, and now it’s a poster child for the excess and opportunity that has marked the space, especially as bitcoin has taken off and as Coinbase, the crypto exchange, has gone public.
And as of Tuesday, enthusiasts have massed, and have been trying all day to get the price to $1. At this writing, amid a generally down day for equity and crypto markets, the goal seems elusive, at least in terms of sticking to that level. After reaching a bit more than 42 cents, dogecoins were recently trading hands at about 35 cents, down roughly 10 percent on the day.
Still, considering the fact that the coins were trading at about a nickel roughly a month ago and half a penny at the dawn of this year, the upward trend has been a whirlwind – now with a market cap that, per CoinDesk, stands at more than $44 billion.
There are hints here and there, depending on where you look, of at least some traction beyond the “joke” status of the digital coin itself. In one recent example, electronics retailer Newegg said it would accept Dogecoin as payment through the use of BitPay wallets (Newegg has been accepting crypto payments for a couple of years now).
But, the occasional merchant embrace notwithstanding, it’s important to note that Dogecoin still exists largely as a stalwart of meme culture and social media – where GameStop and other touts have soared and crashed, depending on the day – and on the mercurial moods of speculators.
And here’s a sign of just how far the speculators have gone: Dogecoin’s market cap is roughly that of Ford, and while the two “holdings” could not be more different, consider the fact that market cap can be a rough proxy of earnings power, staying power and, well, commercial presence in everyday life. By holding onto a stock, or any asset or commodity, holders are implicitly stating that they have some claim on the business. But really, the Dogecoin excitement seems to be based on following popular cheerleaders, from Elon Musk (who has tweeted about Dogecoin) to Snickers (yes, it’s true). Snoop Dogg, the rapper, has been along for the ride, too.
The Dogecoin trade – for it’s a trade, really, with no real seismic shift of an embrace, where, for example, Tesla has said you can buy a car with bitcoin, but not Dogecoin – is getting crowded. The fear of missing out is powerful. And the fun of being part of the in-crowd is powerful, too. But so is panic, which could have a cascading effect and accelerate on any notable price drop. Without real fundamentals in place, you’re really just having fun, albeit with real funds at stake.
And it’s all fun and games … until someone loses their shirt.
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