Source: Economic DailyUp 16 times in just one monthWhy is Dog Coin So CrazyOur reporter Li HualinAfter Bitcoin broke historical records one after another, another virtual currency, Dogcoin, has recently successfully "gone viral" and attracted market attention.According to data provided by the well-known digital asset trading platform OKEx, as of the morning of February 8th, Dogcoin was quoted at $0
Source: Economic Daily
Up 16 times in just one month
Our reporter Li Hualin
After Bitcoin broke historical records one after another, another virtual currency, Dogcoin, has recently successfully "gone viral" and attracted market attention.
According to data provided by the well-known digital asset trading platform OKEx, as of the morning of February 8th, Dogcoin was quoted at $0.07, a sharp increase of 1600% in just one month compared to $0.004 at the beginning of the year, far surpassing Bitcoin.
The hot market of Dog Coin cannot be separated from the "driving force" of Tesla CEO Elon Musk. Recently, Musk posted a series of articles on social media titled 'Empowering Dog Coins'. On February 6th, Musk launched a vote on social media on "What do you want to use as the currency for the future of the Earth", with over 1 million people participating, and over 70% of netizens choosing dog coins.
So, why did this virtual currency, marked by a picture of a Chaigou, attract so much interest from investors that it even overshadowed Bitcoin at one point?
In fact, Doggie Coin is not a "currency circle" upstart. Like virtual currencies such as Litecoin, it is issued by modifying some parameters on the basis of Bitcoin source code. It is also a "counterfeit coin". However, its birth is full of entertainment significance and can be said to be a product of the prevalence of social media.
In 2013, the price of Bitcoin skyrocketed, and a large number of "counterfeit coins" also emerged. Australian entrepreneur Jackson Palmer and software engineer Billy Marcus created Dog Coin to satirize the speculative atmosphere in the "coin circle". They used the popular online expression pack "Doge" as their name and logo, and set the maximum issuance limit of Dog Coin to 100 billion, with 5 billion new coins produced annually. Compared to the limited supply of 21 million Bitcoin coins, it is equivalent to an unlimited supply.
Initially, Dogcoin was mainly active in the online community Reddit. Due to its strong liquidity, low price, and inherent entertainment and playfulness, Dogcoin quickly gained popularity in the market, becoming the second largest virtual currency after Bitcoin in terms of user volume, and repeatedly launching a surge mode.
In January 2018, the market value of Dogcoin exceeded $2 billion. In July 2020, Gougou Coin sparked a wave of excitement on social media, with a surge in trading volume and a price that more than doubled. By this year, the market value of Dogcoin had exceeded 9 billion US dollars.
Lee Wilhelm, Chief Researcher at OKEx Research Institute, stated that the sharp rise of dog coins this year is not only driven by Musk's "carrying goods", but also related to the recent "American retail group fighting against Wall Street bears" incident. In January of this year, Reddit community retail investors launched a war against Wall Street short sellers such as Citron and Melvin, pushing up the stock of GameStop, a previously low-priced gaming retailer, several times. This event has sparked public investment enthusiasm, and the recent surge in Bitcoin and Dogcoin is also a continuation of this event, "said William Li.
So, under the fierce upward trend, can the future price of dog coins surpass that of Bitcoin? Experts say that the current circulation of dog coins far exceeds the total issuance of Bitcoin, reaching 128 billion pieces. Due to the large number of issues and relatively stable prices, it is destined to be difficult to surpass Bitcoin. So far, the highest price of dog coins has reached $0.08.
The industry has been constantly reminding investors to enter cautiously. In the final analysis, like Bitcoin, Dogcoin has no actual value support, lacks a credit entity, and the circulation method is only waiting for others to accept orders. Moreover, Dogcoin has a high concentration of users, making it easy to manipulate prices.
Like other virtual currencies, Dogcoin can be obtained through mining, requiring much less computing power than Bitcoin and almost no technological breakthroughs. "William Li said that currently, Dogcoin" fans "mainly use it for investment transactions, charitable payments, etc., and there are no unique applications, and some application scenarios also face extremely high legal risks.
Dogcoin was born out of banter, but its development has exceeded the expectations of its founder. Jackson Palmer once posted that too many people entered with a mentality of "overnight wealth", which goes against the original intention of issuing dog coins. In 2019, he emptied the content he posted on social media and disappeared into the online world.
The main reason for the popularity of dog coins is still due to Musk's' carrying goods'. If Musk no longer continues in the future, or there is no actual support for action, dog coins will fall to their original level, and there is even a risk of collapse, "said Li Wilhelm.
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