Dogecoin, created for fun, was once 6th in the market cap, beating Ada and Polkadot…Why?

[Digital Today Reporter Hwang Chi-gyu] Dogecoin, known as a project started for fun, has jumped 400% in price this week alone. Again, the tweet from Tesla CEO Elon Musk seems to have had an impact. Since CEO Elon Musk tweeted about Dogecoin on the 14th (local time), Dogecoin price has tripled in 36 hours.

DOGE is a cryptocurrency that forked the Litecoin code and originated from the Doji Meme, which attracted attention on the Internet in 2013. It is known that Billy Marcus, the developer who created Dogecoin, started the project for fun at first.

However, in terms of price alone, it has already become a non-negligible entity in the cryptocurrency version. According to CoinMarketCap, a site that provides cryptocurrency information as of 10:10 am on the 17th, the market capitalization of Dogecoin is around $45 billion, ranking 6th among all cryptocurrencies. Excluding the stablecoin Tether, the only cryptocurrencies that have a larger market capitalization than Dogecoin are Bitcoin, Ethereum, Binance Coin, and Ripple XRP.

Dogecoin is ahead of the market cap of Cardano Ada and Polkadot, which are public blockchains that represent Ethereum’s counterparts in smart contract platforms.

Dogecoin has not shown any special technological innovation in the blockchain field. It’s not that good applications run on Dogecoin. There is no company that makes sales or profits behind Dogecoin, nor does some people like Bitcoin or Ethereum recognize that Dogecoin will be the basis of a new financial system.

Nevertheless, the surge in Dogecoin price is interpreted as a result of the combination of memes-based fun elements, community power, and people’s sentiment that if you invest, you will be able to make a lot of money. There are many sayings that it can be seen in a similar context to GameStop, a game retailer whose stock price has soared compared to actual business performance.

Elon Musk’s tweet is said to be playing a role in fueling this atmosphere.

There is also an analysis that the changed tendency of people due to the Corona 19 situation is also affecting the price of Dogecoin.

According to a recent New York Times article, millions of people are being fired in the coronavirus pandemic, but many of these bank accounts are overflowing with disaster aid and government cash flow into the economy. They saved a lot of money, but the attractiveness of traditional investments such as stocks and bonds has become less attractive.

Many people who became bored with the pandemic began to take more risks. Investing in SNS services such as Discord and Reddit is a hot issue. This is creating mini-bubbles in various areas that only a few understand. The New York Times says that SPAC and NFT, which were once vague words, are virtually becoming commonplace like S&P. It also said that it provided a lot of demand not only from so-called memes stocks such as video game retailer GameStop, but also from public listings such as Roblox and Coupang recently.