Who is buying dog coins? Over 80% of the transaction volume comes from stable currency trading pairs, with domestic users being the main buyers

Source: Reading Special'Tothemoon' is a buzzword in the industry, meaning that currency prices soar.But the joke is about to come true

Source: Reading Special

'Tothemoon' is a buzzword in the industry, meaning that currency prices soar.

But the joke is about to come true. In early April, Tesla CEO Elon Musk tweeted that he would use SpaceX to bring a DOGE (dog currency) to the moon. Afterwards, DOGE embarked on a rapid upward trend, breaking through $0.1 on April 14th and then hitting a historic high of $0.43 on April 19th. The currency price surged by 336% in just one week, and the 30-day investment return rate directly soared from 113% to 587%, ranking in the top ten in market value.

What are the noteworthy changes in Dogecoin's on chain data behind the DOE craze? As an imitation coin of BTC, how is DOGE currently developing compared to BTC? Who is buying DOGE? How does the popularity of social media affect currency prices? After analyzing the market data and on chain data of DOGE this year, PAData found that:

1) From the perspective of earnings performance, the rapid rise of DOGE started in mid April this year, with the overall increase in currency prices exceeding 7045% this year, while BTC only rose by 90% during the same period. The significant increase in DOGE has increased its 30-day return from 65% to 587%, reaching a maximum of 941%, reversing the previously mild upward trend.

2) From the perspective of trading volume sources, the main buyers of this round of DOE may come from China. The trading volume of Binance, OKEx, and Huobi exchanges accounts for over 60% of the total trading volume of DOE, and the trading volume of DOE/USDT pairs accounts for as much as 78% of the total trading volume, far higher than the cumulative 9% trading volume of DOE and TRY, USD, and EUR currency trading pairs. Within the market coverage of the three exchanges, the main market that requires stable currency as a trading medium is the domestic market, which may mean that the main buyers of DOGE are domestic users.

3) From the on chain data, Dogecoin's on chain activity has significantly improved this month. In April, the number of daily active addresses increased by 37.81% month on month, the total daily settlement amount increased by 1258.02% month on month, and the daily transaction handling fee increased by 114 times.

4) From the perspective of media popularity and the currency price trend of DOGE, both Twitter and Google search indices are positively correlated with the currency price trend of the past week, with the strongest positive correlation with the current day's currency price. Especially in April, the number of tweets is strongly correlated with the trend of currency prices within a week, with the Pearson coefficient between the number of tweets and the currency prices of different time periods of DOGE exceeding 0.7.

5) The correlation between the spread of heat and the price of coins in different time periods does not show an increasing or decreasing trend over time, which means that the impact of the spread of heat on the price of coins in different time periods has a certain degree of randomness.

DOGE has risen by 7000% this year,

80% of trading volume comes from stable currency trading volume

Since the beginning of this year, DOGE has risen from $0.0057 at the beginning of the year (January 1) to $0.4073 currently (April 19), with an overall increase of an astonishing 7045.61%, far higher than the 89.71% increase in BTC coin prices during the same period.

The rapid rise of DOGE actually began in April this year. According to statistics, since April, DOGE has skyrocketed from $0.062 to $0.407, an increase of approximately 557.04%. The maximum daily increase during the period was 101.49% on April 16th, when DOGE rose from $0.1816 at the opening to $0.3659 at the closing.

Affected by the rapid rise in currency prices, this year's 30-day investment return rate of DOGE has changed from last year's basically stable trend, showing a significant upward trend. According to statistics, last year, the 30-day return rate of DOGE increased from -10.7% to 42.6%, with an overall increase of about 53 percentage points and an average annual value of about 7.3%. The trend remained stable throughout the year with some improvement. This year, the 30-day return rate of DOGE has soared from 64.7% to 586.6%, with an overall increase of about 521 percentage points and an average annual value of about 211.1%. The annual return rate shows a clear upward trend, but fluctuates greatly. During the same period, BTC's returns were more stable, with less volatility in its 30 day return. Last year, BTC's average 30 day return was about 11.7%, while this year's average was about 33.6%, an increase of only about 22 percentage points.

What are the main sources of upward momentum for DOE this year? From the composition of the trading volume in the secondary market of DOGE, the main funds may come from domestic sources. According to the distribution of trading volume on the exchange, Binance, OKEx, and HuobiGlobal are currently the three main trading markets, with trading volume accounting for 34.64%, 14.19%, and 11.38%, respectively, with a cumulative proportion of approximately 60.21%. If we add the trading volume of exchanges such as ZB.COM, Gate.io, Kucoin, FTX, Biki, MXC.COM, etc., the trading volume of these exchanges, which are mainly domestic users, will cumulatively account for 68.53% of the total trading volume of DOGE.

In addition, based on the proportion of trading volume between the main trading pairs of DOGE, the current trading volume of DOGE/USDT is about 78.65%. If the trading volume between DOGE and BUSD, HUSD, and USDC is included, the total trading volume between DOGE and stable currency trading pairs will exceed 80%. On the contrary, the cumulative proportion of transaction volume between DOGE and legal currency trading pairs such as USD and EUR is only about 9%. Within the market scope covered by Binance, OKEx, and HuobiGlobal, the markets that require stable currency as a trading medium are mainly domestic markets, which may also mean that the main buyers of DOGE are domestic users.

The number of daily active addresses on the DOGE platform increased by 38% month on month,

Monthly average settlement total increased by 1258% month on month

Driven by the good market performance of DOGE, the on chain activity of the underlying network Dogecoin has also been comprehensively and significantly improved.

In terms of user size, the daily average number of active addresses on the chain of Dogecoin in April exceeded 100000, reaching around 124900, approximately 1/9 of the daily active addresses on the Bitcoin network during the same period. Although there is still a significant difference in the absolute number of active addresses between Dogecoin and Bitcoin, the trend of steady decline in the daily active addresses of Bitcoin networks this year is different. Dogecoin's daily active addresses have shown a rapid growth, with the number of daily active addresses in April increasing by 37.81% compared to the previous month's average month on month.

Compared to the number of active addresses, the daily increase in the number of online transactions in Dogecoin is more significant. According to statistics, the number of on chain transactions in Dogecoin has increased from 34600 at the beginning of the year to 70900 currently, with an overall increase of approximately 104.91%. Among them, the increase in April was about 51.92%. During the same period, the number of daily on chain transactions of Bitcoin decreased from 261300 to 207300, with an overall decrease of about 20.67%.

If we consider the ratio of monthly daily active addresses to daily transaction times comprehensively, it can be found that since the beginning of this year, the number of transactions per 10000 active addresses in Dogecoin has slightly increased from 4210.53 to 4467.57, an increase of approximately 6.10%. The number of transactions per 10000 active addresses in Bitcoin decreased slightly from 2836.81 to 2559.02, a decrease of approximately 9.79%. Overall, the activity of active addresses in both networks remained stable, but the activity of Dogecoin active addresses slightly increased.

Another noteworthy point is that recently, Dogecoin's total on chain settlement has exceeded Bitcoin multiple times. For example, on April 16th, 17th, and 19th, the total on chain settlements of Dogecoin were approximately $64.92 billion, $22.93 billion, and $47.73 billion, respectively, while on the same day, the total on chain settlements of Bitcoin were approximately $50.98 billion, $20.96 billion, and $27.87 billion, respectively.

Dogecoin has seen a significant increase in the monthly average on chain settlement amount this year, although this may be temporary. According to statistics, in April of this year, the daily average on chain settlement amount of Dogecoin was about 11 billion US dollars, an increase of 1258.02% compared to the March average month on month, equivalent to a 13.5 fold increase. During the same period, Bitcoin increased by 24.96%.

The active online trading activities have also increased the income of Dogecoin miners. This year, the transaction fees for Dogecoin have reached $999200, of which the total fees incurred in April alone reached $563000, higher than the total of the previous three months. The peak daily handling fee this year occurred on April 16th, with the handling fee generated on that day reaching $187000, accounting for approximately 18.71% of the total handling fee this year.

From the average transaction fee, this year, the daily transaction fee for Dogecoin has increased from $0.0056 at the beginning of the year to the current $0.64, an increase of 11350%, equivalent to a 114 fold increase. During the same period, the daily transaction handling fee for Bitcoin increased from $1.83 to $26.74, an increase of approximately 1361.20%, equivalent to a fourfold increase. If DOE continues to maintain a rapid upward trend, it is not ruled out that there may be more computing power participating in Dogecoin mining in the future, and transaction fees may be reduced at that time.

This month, there were over 400000 daily related tweets from DOGE,

Social popularity is strongly correlated with currency prices within a week

Many people believe that this year's surge in DOGE is related to Tesla CEO Elon Musk's multiple "orders" on Twitter. So, to what extent has the popularity of Dogecoin's spread on social media platforms and cyberspace affected the actual currency price of DOGE?

In late January and mid April of this year, the number of # Dogecoin tweets reached its peak. Among them, on January 29th, the number of tweets with # Dogecoin topics on Twitter reached a peak of 967100, which is about 4.8 times the number of # Bitcoin topic tweets in the same period.

According to the correlation statistics between the number of tweets and the price of DOGE in different time periods, there is a positive correlation between the number of tweets and the coin price of DOGE. That is, when the number of tweets increases and the popularity of social media increases, the coin price of DOGE increases. Among them, the number of tweets has the highest correlation with the current day's DOGE coin price, with an average Pearson coefficient of about 0.63 in the first four months. Secondly, the correlation with the next seven days' DOGE average price is also relatively high, with an average Pearson coefficient of about 0.60 in the first four months. This means that the more tweets there are, the higher the coin price of DOGE on that day, and the higher the average coin price for the following week.

It should be noted that the correlation between the number of tweets and coin prices at different time periods does not show an increasing or decreasing trend over time, which means that the number of tweets has a certain randomness in its impact on coin prices at different time periods. For example, in February, the number of tweets had the smallest impact on the current currency price, but this impact increased over time. However, in April, the number of tweets had a greater impact on the current currency price and the next three days' currency price, while the impact on the other two time periods' currency prices decreased.

From a broader perspective of online communication, the positive correlation between the popularity of communication and the DOGE still exists. According to the Google Search Index, like Twitter, late January and mid April of this year were also two peak periods for the Dogecoin Google Search Index. On April 16th, Dogecoin's Google search index was about 173.3, while Bitcoin's search index was about 178.8, which is already very close.

According to the correlation statistics between the search index and the price of DOGE in different time periods, the search index is positively correlated with the coin price of DOGE. That is, the higher the search index and the popularity of online dissemination, the higher the coin price of DOGE. Among them, the search index has the highest correlation with the current day's DOGE coin price, with an average Pearson coefficient of about 0.74 in the first four months, which is significantly higher than the correlation of the other three time periods' coin prices. The average Pearson coefficient of the other three time periods is around 0.60. This means that the more Google searches there are, the higher the coin price of DOGE that day. Moreover, in terms of its impact on the currency price of the day, the relevance of Google's search index is greater than the number of tweets.

However, the Google search index also has a certain degree of randomness in the correlation between currency prices in different time periods. For example, in March, the Google search index had the highest correlation with the following day's currency price, while in April, the Google search index had the highest correlation with the current day's currency price.

Is Dog Coin worth holding for the long term? "After the surge in the price of Dog Coin, it hit Weibo hot search. Under this topic, 21st Century Economic Report launched a vote on whether it is worth holding for the long term. Currently, 4437 out of 11000 people believe it is not worth holding for the long term, accounting for about 40.37%, and another 3771 people believe it is worth holding for the long term, accounting for about 34.28%. Dogecoin was born as a joke, but there is currently no consensus on whether to treat it with a playful mindset in the future.

(Original title: "Who is Buying Dog Coin? Over 80% of trading volume comes from stable currency trading pairs, with domestic users being the main buyers")

Editor Wu Xumei Reviewed by Wu Jianlin Reviewed by Zhang Xuesong and Li Linxi

This article is from "Reading Special" and only represents the author's viewpoint. The National Party Media Information Public Platform provides information release and dissemination services.