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As Elon Musk Touts Dogecoin Again, Here's What You Should Know About The Cryptocurrency

December 21, 2020 6:56 am
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As Elon Musk Touts Dogecoin Again, Here's What You Should Know About The Cryptocurrency

A few words by Tesla Inc (NASDAQ:TSLA) Elon Musk on social media was all it took to send Dogecoin (DOGE) soaring 26% in a 24-hour period leading up to press time. The Shiba Inu-themed joke cryptocurrency’s latest rally is ironically a serious mirror of reflection on the cryptocurrency space in general.

Here're some things to know about Dogecoin and its strength relative to the overall cryptocurrency market.

Fire Burn and Cauldron Bubble: Cryptocurrencies are on fire — reaching for new highs every day. The apex cryptocurrency, Bitcoin (BTC), crossed the $24,209.66 mark on Sunday, hitting yet another milestone.

Dogecoin too went soaring after Musk sent out a tweet saying “One word: Doge.” The meme-based cryptocurrency has rallied 52.34% in the last seven days.

Cutesy Canine Market Mania: In 2018, Dogecoin’s founder Jackson Palmer wrote an article for Vice titled “My Joke Cryptocurrency Hit $2 Billion and Something Is Very Wrong.”

Palmer, an Australian, got disenchanted by what he called “shark-like” scammers and opportunists drawn to the cryptocurrency who fleeced members for millions of dollars. He backed away from the project in 2015 and said in the article he owned less than $50 worth of Dogecoin.

“Dogecoin’s valuation is the result of market mania that has resulted in inexperienced investors buying up low-priced assets on a whim, hoping that they will follow Bitcoin’s meteoric trajectory,” wrote Palmer.

Shibes Of The World Have Nothing To Lose: Shibes — as Dogecoin aficionados call themselves —  have enjoyed a return of 137% on a year-to-date basis even as volumes have soared to $635.18 million. But this is not the first time the currency has seen such massive upwards momentum.

The dog-themed currency skyrocketed 1,377% between Nov. 7, 2017 and Jan. 7, 2018. Musk's favorite cryptocurrency also saw significant upwards movement at the beginning of this month.

The Prudential Puppy: Investors may as well heed the advice of the Dogecoin founder who wrote, “It’s difficult to predict how much the current crypto bubble will inflate, or when it’ll burst (not if).”

Palmer is of the opinion that once the price bubble pops it will take all the hype with it. Yet, the cryptocurrency crowd is undeterred by such trivialities and believers such as MicroStrategy Inc (NASDAQ:MSTR) CEO Michael Saylor are dishing out pointers to Musk to convert Tesla’s entire balance sheet into Bitcoin.

Benzinga's Take: When it comes to Dogecoin or any other coin for that matter, the best advice for prudential puppies is to invest at your own peril.

Price Action: DOGE closed nearly 29.4% higher at $0.005066 at press-time, while BTC traded 2.10% higher at $24,016.48.

See Also: As Bitcoin Shoots Past $22K, Analysts Can Already See It Reaching For $30K

Photo by Dogeloverforever on Wikimedia

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