Dogecoin, the digital currency inspired by the popular Doge meme, now has a market capitalization above $2 billion.
Its founder is worried the coin's recent rise indicates wider frothiness in the cryptocurrency market.
Dogecoin, the alternative cryptocurrency inspired by a popular meme, has surged over the weekend and now has a market capitalization over $2 billion.
It soared above the $1 billion milestone for the first time on Christmas Day and climbed over $2 billion on Sunday. As for its price, the coin was trading at $0.018 at the time of writing. That's up 800% from $0.002 a coin at the beginning of December.
Founder Jackson Palmer, who created the digital currency as a joke, said new found interest in Dogecoin is a concerning indicator of wide-spread frothiness in the cryptocurrency market.
"I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over 2 years has a $1B+ market cap," Palmer told cryptocurrency watcher CoinDesk.
Wall Street has been raising red-flags about a bubble in the market. In fact, UBS chief economist Paul Donovan said cryptocurrencies are in "the bubble to end all bubbles."
"A twenty-fold increase in bitcoin prices in just two years, and an absence of any fundamental economic backing, cryptocurrency prices are almost certainly a bubble," Donovan wrote in an October memo.
As for Dogecoin, Palmer, a group product manager at Adobe, and Billy Markus, a software engineer at IBM, created it "without much real thought," according to reporting by Motherboard.
As Palmer told Motherboard's Patrick McGuire, "one night after work, I sat down with a beer, I had too much time on my hands, and I bought Dogecoin.com."
Markus stepped in to help make Dogecoin an actual digital currency.
The name of the coin is an homage to the popular internet meme known as Doge, which became popular in 2013 and features the face of a dog with comic sans texts in the background.
This is the meme:
