Dogecoin: The Profit-Making Joke

Cryptocurrency Dogecoin’s recent meteoric rise to more than $10 billion in market value is rocking the investment world and stunning its own creators.

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Dogecoin was created and developed in 2013 by software engineers Billy Markus and Jackson Palmer, who, according to the official Dogecoin Website, wanted to create a “decentralized, peer-to-peer digital currency that enables you to easily send money online.” This means that the creators wanted to create a currency that is easily tradable with other people and does not require a centralized stock market or investment house. Dogecoin is based off of the viral 2008 internet meme of a Shiba Inu dog.

Dogecoin became popular in its early years, even sponsoring teams in major sporting events such as the Jamaican bobsled team in the 2014 Winter Olympics, but it did not see a prominent rise in value or international popularity until early 2021.

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In January 2021, a group called WallStreetBets on Reddit rallied together to bring the GameStop market up. As the value of GameStop stocks rose, other Reddit users pushed to do the same with Dogecoin.

Although both GameStop and Dogecoin rise in value coincide with each other, they are both different. GameStop’s rise was a response to hedge funds, which are groups of funds pooled together by multiple investors, shorting the stock. Shorting a stock means that the investors bet money against GameStop, earning money as the stock value of GameStop plummets. Redditors invested in Dogecoin as a joke, but what started as a joke turned into an opportunity for small investors to make money while jumping on the investing bandwagon.

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A New York Times article shows that the value of Dogecoin went up 1,600% between the start of the year and February 7th. Its value has risen and fallen over the years, but has recently helped many small investors make net gains of hundreds or even thousands of dollars. Dogecoin’s rise exemplifies how even the smallest of investors can change the course of cryptocurrency values.

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CoinMarketCap, a cryptocurrency ranker, ranks Dogecoin as the 12th biggest cryptocurrency in the world as of February 7th, and American business magazine Forbes has listed numerous celebrities and business people who endorse Dogecoin, such as musicians Gene Simmons and Snoop Dogg, investor Mark Cuban, and Tesla CEO Elon Musk.

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Currently, Dogecoin seems to be thriving, but multiple investors question if Dogecoin would keep up the momentum. Trading website Capital claims that the value of one Dogecoin is worth $0.07818, and could reach past $0.10 by the end of the month. The initial launch price of one Dogecoin was $0.000232, and has the predicted price point of $0.0343 according to the Wallet Investor cited in the above article. Investors saw a 14,684% increase of the value of their investments.

 

The Capital article also states that some groups expect Dogecoin to reach a high of $0.0450 in 2025, while other groups predict that Dogecoin will have a value average of $0.073692 and a high of $0.081293 by the end of the year. On a long-term scale, the article predicts that Dogecoin could average $0.152755 in 2025. These predictions can change dramatically and unexpectedly. Since Dogecoin began as a joke, chances are that the joke will lose popularity in the future, and the cryptocurrency would start to lose value.

 

Even with a number of investors attempting to discourage investing in Dogecoin, the cryptocurrency continues to increase in value. This cryptocurrency shows how something created as a joke between two people can turn into a billion dollar internet frenzy.