Dogecoin’s dream target of £0.72 ($1) looked somewhat uncertain this week after an end-of-month rally failed to carry the momentum. After prices spiked to an all-time high of £0.500845 ($0.696495) on Wednesday, May 5, the bears took over and drove the memecoin down. But DOGE has clawed back some of the losses and is back in the green as of Friday morning.
Coindesk data at 9.17am BST shows DOGE exchanging hands for £0.450187 ($0.626047) – up by about 1.3 percent on the last 24 hours.
Despite the mid-week losses, DOGE holders are still up 12,500 percent on last year’s prices and the token’s market cap has surpassed the value of major companies like Twitter and SpaceX.
After trading for fractions of a penny for eight years, Dogecoin entered the mainstream crypto sphere earlier this year and has only gone from strength to strength.
To put the memecoin’s rise into perspective, at the start of April, DOGE was trading for a measly £0.036 ($0.05) per token.
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And one year ago, DOGE was trading for as little as £0.0019 ($0.0026).
So what has driven Dogecoin’s meteoric rise on the crypto markets? After all, the token was created in 2013 as a meme or online joke.
Celebrity endorsements and the success of other memestocks like Gamestop (GME) have brought a lot of attention to Dogecoin.
South African billionaire Elon Musk, in particular, has been frequently tweeting and talking about the token, bolstering confidence in the “currency of the internet”.
He has since been joined by the likes of TV chef Guy Fieri and US rapper Snoop Dogg, who also jumped the DOGE hype train.
Software engineer Billy Markus, who created Dogecoin alongside Jackson Palmer in 2013, has now shared some of his thoughts on why Dogecoin has been a rollercoaster of ups and downs recently.
Mr Markus goes on Twitter by the handle Shibetoshi Nakamoto – a reference to Bitcoin’s mysterious creator, Satoshi Nakamoto – is still very much part of the DOGE community even though he has handed over the reins of development.
He tweeted on Friday: “Why does $DOGE fall? Same reason as why $DOGE rises. Buying and selling. That’s it.
“The crypto space is ruled by emotion and sentiment.
“People buy and sell for their own reasons, and those decisions move the price.
“Always has been. Markets gonna market.”
In the simplest of terms, high demand for DOGE – that is, many people buying the token – is going to drive the price upwards.
Positive news, public endorsements and mania can drive the price up by encouraging people to buy.
The opposite is true when large quantities of the cryptocurrency are sold-off – prices will start to plunge.
There is no way of truly knowing which way a token or stock asset is going to go, so you should never invest money on a whim.
If you have thought about buying Dogecoin to make a profit, you should be aware of the risks involved.
Never invest more money than you are prepared to lose.
The Financial Conduct Authority (FCA) said: “If you invest in cryptoassets, you should be prepared to lose all your money”.
Mr Markus himself told his more than 137,000 Twitter followers: “I wanna reiterate my actual positions since I keep getting new followers:
“- Crypto investing is hecka risky, be careful and research
“- I don’t have any price predictions
“- It’s all worth whatever people are willing to pay
“- The most important thing to me is community, not price”