Dogecoin: A Good Investment or Simple Pump & Dump?
I like many people remember a time when Bitcoin was this little known thing relegated to the deepest crevices of the internet. In the 2010s you heard about its links to the deep web, The Silk Road specifically, which was a site that allowed you to buy and sell a number of items and substances not commonly found in your local supermarket. From time to time, you’d also hear horrifying stories about people losing access to their bitcoin wallets and the pain that came with essentially losing thousands if not millions of pounds. Since those early years, the value of bitcoin has skyrocketed and it is used all over the world, including countries like Nigeria where it is embraced as an alternative to naira among the tech savvy young.
As of right now, 1 bitcoin is valued at £41,702.60. Of course, if you’ve spent enough time with cryptocurrencies, you know that prices fluctuate by the minute. Gone are the days of buying a couple of bitcoins for a couple of pounds. Now, most are buying and selling in much smaller quantities also known as milliBTC and satoshis. Today, however, there is a crypto that’s very reminiscent of those fun-loving early years of bitcoin. The only problem is that it’s based on a meme and could theoretically collapse at any given moment.
Dogecoin is a cryptocurrency created in 2013 by software engineers Billy Markus and Jackson Palmer. It was meant to be a joke, a way of parodying the crypto hype and hysteria but now, many individuals both young and old are embracing it as a solid form of investment. 1 dogecoin is valued at around 40p (literally fluctuating by the second) and dogecoin has a market cap of £80 billion. Some have made thousands from it by investing early when it was worth pennies. Some have even made millions. Then there are those secretive few who have made billions. In the crypto community, these dogecoin billionaires are referred to as ‘Whales’. Whenever they decide to cash out, they end up causing a big “dip” and the price of dogecoin inevitably drops. Some crypto enthusiasts believe that these whales are behind pump and dump schemes that attempt to boost the price of doge through media manipulation, false evidence or exaggerated statements by celebrities. It’s for this reason, as well as its association with the doge Shiba Inu meme that some people continue to think it’s a joke or a scam.
It’s hard to completely discount dogecoin. Many experts in their field have recently come forward singing its praises. On May 3 2021, Cuban tweeted, ‘As long as more companies take doge for products/services, then Doge can be a usable currency because it MAY hold its purchasing value better than a $ in your bank. If interest rates skyrocket or the amount spent falls or stagnates, so will Doge. Yes, a joke is now legit’. On May 3 2021, Oakland Athletics baseball team announced that they would sell tickets for 100 units of doge. Then there’s Elon Musk.
Musk is well known to be a proponent of cryptocurrency and has made countless statements and business decisions that prove this. Back in February of this year, Tesla bought $1.5 billion of bitcoin with plans to accept it as payment. Musk recently stated that “there’s a good chance that crypto is the future currency of Earth”. Over the last few weeks, Musk has referenced Dogecoin on his Twitter and mentioned it again last night while hosting for SNL. This is where things get crazy.
Prior to SNL, the price of doge was steadily climbing. The excitement and straight up euphoria was hitting insane levels and many believed dogecoin would hit 1 dollar or 72p once SNL aired. Unfortunately, as we all know, nothing in life is ever that simple. Musk was brilliant on the show. He was funny, awkwardly confident and entertaining, but then came the “news bit”. After constant bickering back and forth about what dogecoin actually is, Michael Che said, “So, it’s a hustle?” Musk replied, “Yeah, it’s a hustle.” Dogecoin dropped at least 30% around that time, but some dogecoin enthusiasts on reddit already predicted that this would happen days in advance. In all likelihood, it was probably a whale who always intended on selling regardless of what Musk said or did.
Cryptocurrency and everything that comes with trading and speculation will always be risky. There are positives and negatives in anything involving money. What I do know is that cryptocurrency and dogecoin specifically is changing lives. Young men who are still in high/secondary school now have thousands in their bank accounts and no longer have to worry about student loans. On r/dogecoin a community on reddit, a man posted,
‘Ik we are supposed to hodl but I finally made enough to finish paying off my moms chemo bills! I’m so happy for the spike and I hope the doge family will forgive me. It’s been a hell of a ride and I’m glad I could’ve been a part of the cryptocurrency revolution!!! DOGE TO THE MOON!!!!’
If that isn’t a testament to the power and importance of dogecoin, I don’t know what is.
