Pengpai News Reporter Ye YingheWhat is a dog coin with a daily increase of over 900%? What happened?On the morning of January 28th, a cryptocurrency called "Dog Coin" emerged. According to Coinmarketcap, a cryptocurrency pricing website, the price of Dogcoin has risen sharply from $0
Pengpai News Reporter Ye Yinghe
What is a dog coin with a daily increase of over 900%? What happened?
On the morning of January 28th, a cryptocurrency called "Dog Coin" emerged. According to Coinmarketcap, a cryptocurrency pricing website, the price of Dogcoin has risen sharply from $0.0077, reaching around $0.078 at one point, with an increase of over 900%. As of 16:00, the price of dog coins has dropped to $0.05133, with a 24-hour price increase of 370.73%.
One week trend of dog coin prices Source: Coinmarketcap
According to Coinmarketcap data, dogcoin (DOGE) was generated based on popular "DOGE" network pictures, and was separated from Litecoin in December 2013. The creators of Dogcoin envisioned it as an interesting and easy cryptocurrency. Tesla CEO Elon Musk has previously tweeted multiple times on social media, mentioning Dogcoin.
What caused the skyrocketing trend of dog coins?
The forced air battle between WallStreetBets and Wall Street institutions has spread to cryptocurrencies
Yu Jianing, the rotating chairman of the Blockchain Special Committee of the China Communications Industry Association and the president of HuoCoin University, stated that this incident originated from the close battle between the Reddit Forum's subsidiary section, WallStreetBets, and Wall Street institutions. WallStreetBets is a community where retail investors are extremely united, and the investment mentality of community members is strong. Under the large-scale release of water by the Federal Reserve, the funds in the hands of retail investors have formed a very large scale, which has never made it possible for retail investors to group together and squeeze out institutions. Dogcoin is a digital asset that, like Bitcoin, can achieve peer-to-peer transactions on decentralized networks. Gougou Coin started with a grassroots online culture, and due to its extremely cheap asset prices, its influence expanded and formed a unique reward mechanism on the overseas content platform Reddit, thus forming a powerful online community.
After experiencing the GME (Game Station) incident, the FOMO (missed panic) sentiment among retail investors was particularly strong. In response to the 'call for orders' from the opinion leaders of WallStreetBets and the simultaneous lockdown on stock investments such as GME by Wall Street, American retail investors stormed into the digital asset field, creating a' coin circle 'of GME, "said Yu Jianing.
Recently, retail investors in WallStreetBets pushed the stock of Game Station up to $347.51 to fight against Wall Street's short sellers, with a market value surge of over $10 billion. Since January, the market value of game stations has skyrocketed 18 times to approximately $24 billion. Multiple Wall Street short selling institutions have exploded and left the market. On January 28th, American online brokerage Robin Hood implemented restrictions to prevent its users from purchasing other stocks such as GME, and the WallStreetBets server was also temporarily banned. The anger of retail investors has further escalated. At the same time, a user named WSBChairman (a big V "wsbmod" impersonation account) on the forum began to post dense tweets about cryptocurrencies on Twitter.
In addition, Musk also released a picture of a dog at 6:47 am on January 29th, which is considered a "platform" for dog coins.
Musk tweeted on the morning of January 29th
"Compared with the traditional financial market, the size of the digital asset market is relatively small, especially the dog coin, which is a very cheap asset in its own currency. A large number of funds from the traditional market will inevitably lead to a sharp rise in the currency price, which will further affect market sentiment, causing the price to rise more than 700% in two days," Yu Jianing said.
Narration of "retail investors fighting Wall Street" and the emergence of asset foam
William, the chief researcher of OKEx Research, pointed out that both the surge in GME stocks and the rise in dog currency can be explained by Robert Schiller's "narrative economics". Narrative "plays a crucial role in it, as it can be said," American retail investors vs. Wall Street institutional bears. "This narrative itself has enough perspective. This narrative, labeled as" a confrontation between leeks and elites "and" resistance from civilians, "has long been popular. Driven by online social media and traditional media, it has begun to spread globally like a virus, gaining profound influence, The resulting popular mindset of "illiterate civilians defeating evil and greedy Wall Street tycoons" has won applause from the melon eating crowd, and everyone has joined the narrative, driving up the prices of related assets.
I think this is pure market hype, "Gu Yanxi said.
Yu Jianing also pointed out that this irrational speculative sentiment is extremely unhealthy, and the risk of assets such as dog coins is already very high. In 2017, there was a similar trend in the digital asset market. Some digital asset prices rose dozens or even hundreds of times within a week. However, when speculation and missed panic reached its peak, a huge amount of asset foam would emerge, and when the foam inevitably burst, the market risk would be higher and higher. By the second half of 2018, there were not many investors who could maintain high returns, and some investors not only had no returns but also lost their principal. We need to take history as a lesson. Investment involves risks, and digital asset prices can rise or fall sharply, and even some digital assets may have zero value in extreme cases.
However, Bitcoin miner Ajiu, who holds 100000 dog coins in his hand, believes that dog coins may fall in the short term, but are bullish in the long term.
The only reason I bought dog coins is to pay tribute to my idol Musk, "he said.
I don't know much about Dogcoin, but Elon Musk is optimistic. He has tweeted multiple times to make orders for Dogcoin, and if he can be optimistic, it will definitely have unlimited prospects, "Ajiu said." It's okay if I don't understand, he can understand
In January 2020, he bought 2000 yuan of dog coins for 0.015 yuan, and made up 100000 pieces with the dog coins given by others in his hand. As of now, the value of dog coins in his hands exceeds 40000 yuan, which is 26 times the original amount.
I'm going to sell half and keep half, "Ajiu said. However, when Gougou Coin rose to 0.18 yuan in the morning, he originally intended to sell it all on the exchange and has been "stuck until now".
Editor in charge: Zheng Jingxin
Checked by: Zhang Liangliang
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