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It’s Hard to Take Dogecoin Seriously, But the Doge Doesn’t Care
The cryptocurrency that started as a joke has shot up in price thanks to memes, hope for a big score, and not much else
By
28 April 2021, 20:26 GMT+5
The golden Dogecoin
The golden Dogecoin PHOTOGRAPHER: PANTHER MEDIA GMBH/ALAMY
Here are some things with a total market value in the neighborhood of $40 billion: Insurance giant Prudential Financial Inc., the manufacturer Carrier Global Corp., and, at just a few billion less, Southwest Airlines Co. Or, for a recent price of about 30¢ each, the supply of Dogecoin, the cryptocurrency that started as a joke in 2013. After climbing more than 6,000% this year in a hockey-stick rally, it’s still largely a gag—but one with a potentially darker punchline.
There’s no good reason it should be valuable. “Dogecoin has no apparent commercial or investment use other than as a conduit for speculative mania and the attempt to make a buck,” says Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte., a platform for trading traditional currencies. “I suspect much of its appeal lies in the fact that it is very, very cheap to buy and sell, as opposed to $60,000 for Bitcoin, making it much more approachable to a retail trader who fancies a flutter.”
In reality, the low nominal price hardly matters—whether you put $1,000 into a fraction of a Bitcoin or buy 3,333 Dogecoins, you’re risking the same amount. But as with a penny stock, the lower per-coin price likely has a psychological effect.
Especially when so many people seem to be into Doge for the memes as much as for the money. “Investors buy Dogecoin to participate in a self-deprecating joke about their inability to invest wisely, which keeps going as the price of an individual Dogecoin continues to appreciate,” says Curtis Ting, managing director for Europe at crypto exchange Kraken.
What exactly is a Dogecoin? Like Bitcoin, it’s a digital token that’s only worth what other users are willing to pay or trade for it. It’s not backed by any other asset or business, and it will never produce an income. On the other hand, it lacks the main Bitcoin feature that fascinates crypto believers: a limited supply. There’s no hard cap on the number of coins that can be minted using the computer code governing Dogecoin.
What it does have is a cute logo, based on the “Doge” meme—a Shiba Inu with a look on its face that’s somewhere between goofy and knowing. Even its creators describe the cryptocurrency as a lark. “Dogecoin and its community prides itself on being friendly, fun, and spreading joy,” says co-creator Billy Markus. “It also wasn’t made with any intentions, as evidenced by myself and my co-founder both not gaining much financial benefit from creating it, unlike many coins and tokens people have created.”
Dogecoin also has some history going for it—it’s relatively old for a cryptocurrency. Tokens with a long track record can benefit from heightened awareness and a gradually expanding set of holders willing to talk it up. As interest in cryptocurrency and trading in general spiked this year, Dogecoin was there waiting to be found by retail investors. Sam Bankman-Fried, founder and chief executive officer of the cryptocurrency derivatives exchange FTX, says that after brokerage app Robinhood restricted trading in GameStop Corp. stock at the height of a meme-driven stock-trading frenzy, “hundreds of millions of dollars moved seamlessly” into Dogecoin.
The coin got a big boost on April 20, aka 4/20, a day traditionally associated with pot. Dogecoin users decided to celebrate #DogeDay and boost the price to 42¢, or 69¢—another, uh, joke number—or even $1. They succeeded, sort of, with the price soaring to a record 41.9¢ that day, according to CoinGecko.com. It’s now down 28% from that peak. See