We all know that the crypto markets can be insanely volatile in both directions but yesterday felt like something else with everyone’s favorite memecoin going up 10 times within 24 hours (even breaking into the top 10)! I am, of course, talking about Dogecoin - a cryptocurrency created in 2013 and survived up until this point by harnessing the power of meme magic.
I was around in the crypto space when Dogecoin was first created during the BTC bubble of 2013/14. The best part about it back then was the community as they were so friendly and welcoming. They did things like raise money for a Jamaican bobsled team, sponsored a Nascar driver and often tipped people in DOGE on various internet forums. These things were a huge deal at the time because crypto was still a very nascent space and most people still thought Bitcoin was a scam (and Ethereum didn’t even exist yet) so Dogecoin was many people’s first “taste” of crypto and for that it keeps a special place in many hearts to this day.
Though unfortunately over the years the Dogecoin community basically evaporated and the coin became the target of many pump and dumps as there really is no fundamental value to DOGE. You can see it in the price chart - every once in a while DOGE will quickly increase in price and then quickly dump again a short time later. During this process (commonly referred to as a “pump and dump”), many newer and uneducated crypto investors will lose money from “buying the top” and/or panic selling. Obviously this doesn’t just happen with DOGE but because of the meme, charm and wittiness of the cryptocurrency, it tends to lure many newer people in - not to mention that it has a very low unit price leading people to believe that they are buying it “cheap” because they don’t know what a market cap is.
The above is exactly what we saw play out yesterday with many people who are completely new to crypto buying DOGE via Robinhood (as its one of the handful of cryptocurrencies they support). This led to an extreme price rise in a very short amount of time and was honestly quite scary as it was giving me flashbacks to the end of the last bull market. At this point, DOGE is down around 30% from its recent highs which means plenty of people have lost money. Though, everyone needs a front door to discover this industry and that front door is usually speculating on various coins so there is a bright spot here.
I think we’re about to see a massive wave of new people enter this ecosystem for the first time and my hope is that many of them find their way into the Ethereum and DeFi communities. We have so many awesome apps for them to use and it’d be a shame if they just stayed on centralized exchanges and speculated on random coins - let’s all work really hard to help these new people go bankless!
Have a great weekend everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.