The author of this article, Peter Guo, is from PayPal Finance and is authorized to publish by Planet DailyDOGE, which has been dormant for more than two years, has recently become the focus of attention in the encryption market.The topic of "Dog coin increasing by over 400 times a year" has become a hot topic in search, with over 140000 people even calling on Amazon to accept Dog coin as a payment method
The author of this article, Peter Guo, is from PayPal Finance and is authorized to publish by Planet Daily
DOGE, which has been dormant for more than two years, has recently become the focus of attention in the encryption market.
The topic of "Dog coin increasing by over 400 times a year" has become a hot topic in search, with over 140000 people even calling on Amazon to accept Dog coin as a payment method.
Why does Dog Coin have such a huge increase and appeal?
1. The Past and Present Lives of Dog Coins
The birth of Dogcoin originated from a joke.
In 2013, when the internet became popular with a picture of a Japanese Chaigou, Bitcoin entered the peak stage of the bull market, and cryptocurrency became the focus of the time.
Adobe Australian employee Jackson Palmer joked on Twitter, "Investing in Dogecoin - I'm sure it's the next big thing
After receiving support from many netizens, he quickly registered the domain name of Dogecoin.com and created a picture of Dogecoin, modeled after Bitcoin.
Then another American programmer fan Billy Markus made such counterfeit coins by referring to the source code of Bitcoin and using the Litecoin Scrypt algorithm.
Unlike BTC's positioning as "digital gold", Gougou Coin has had a "gap" with the coin industry since its inception. Its circulation is unlimited, with one coin issued every minute and an additional issuance at an annual inflation rate of around 5% to offset currency loss.
In fact, the Dog Coin project itself did not have many highlights, and the founder subsequently withdrew. Rather than exaggerating its advantages, it can be said that the popular tip culture in the United States has continued the value of Dog Coin.
Dogcoin is mainly used to pay tips, and a common scenario is to reward and motivate excellent content on the internet. In addition, it also serves as a payment commodity or service for general cryptocurrencies, and exchanges other token functions.
Data shows that on Reddit, a gathering of grassroots netizens in the United States, the Dogcoin section has nearly 1.2 million subscribers, second only to Bitcoin's 2.5 million users. The users of the Dog Coin forum are mostly spontaneous organizations, and these users have implanted the adorable and joyful Dog Coin into the American culture of rewards and charity, thereby stimulating lasting vitality.
Who helped drive the bull market?
The harmless dog currency has gone through multiple fierce bull and bear markets, and even startups cannot understand it.
The first bull market: from early March to the end of May 2017, this was the early stage of the cryptocurrency market's counterfeit currency trend, with retail investors flocking to the market. Doggy coins quickly rose to a historical high of $0.0042, taking advantage of the Bitcoin bull market.
The second bull market: from November to December 2017, Dogcoin skyrocketed to $0.002 in two months, also during a crazy period of 1.7-fold rise in Bitcoin.
The third bull market: From April 10th to 20th, 2018, the coin price rose all the way to $0.006, which was also the shortest duration of the dog coin bull market in history, with an increase of only 100%. It was a major rebound in the bear market stage of the entire cryptocurrency market.
The 4th Bull Market: From late August to early September 2018, Gougou Coin rose nearly threefold in the entire crypto market bear market. The reason was that the "Zhengyu Group" registered in Heilongjiang, which operated the capital market, called on members to purchase a large amount of Gougou Coin, and as a result, public opinion began to criticize Gougou Coin with the label of pyramid schemes.
Of course, some people pointed out that the explosive point of this bull market was due to the idea of combining Dogcoin with Ethereum (ETH) to form a "Doghouse". However, during this bull market period, Ethereum did not rebound, and the bridging plan for this smart contract ultimately came to an end.
The 5th Bull Market: The bull market that began at the end of January 2021 is very different from before, with the rise and fall of Dog Coin far exceeding the previous bull markets in terms of duration.
Given the lackluster nature of Dog Coin itself, it seems that the reason for its rise can only be attributed to the waving and shouting of its deep enthusiasts during this period, including celebrities such as ElonMusk, CaroleBaskin, MarkCuban, GenneSimmons, SnoopDogg, as well as organizations such as WallStreetBets and SatoshiStreetBets.
In short, due to the "three nots" characteristics of Dogcoin, which lack strong endorsements, technological highlights, and application implementation, institutional investors rarely pay attention to Dogcoin, and the incentives for previous sharp rises and falls are mostly short-term sentiment driven retail speculative behavior.
PayPal Observation:
By chance, Dogcoin was born out of a joke, spread rapidly due to the culture of rewards, continued to match practical utility, and surged and plummeted due to social hype, becoming a beautiful landscape in the cryptocurrency market.
From the performance of various bull and bear currencies such as Bitcoin, it can be seen that speculative hot money often seeks other targets to increase returns when mainstream currencies such as Bitcoin are at high levels. However, loyal supporters of Bitcoin not only enjoy the pleasure of appreciation, but also are concerned about potential negative impacts.
If short-term speculators can participate in this 100 fold coin frenzy, then considering the recent daily volatility of over 20% and the highest retreat of nearly 50% of Doggy Coin, this should clearly not be a choice for prudent investors to follow suit.
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