What’s up with Dogecoin?

Explaining the Bitcoin alternative that has taken the financial world by storm recently

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For a currency that was created as a joke based on a meme, Dogecoin sure is running circles around the financial world. The cryptocurrency’s value is currently fluctuating in the 30 cent range, after hitting an all-time high of 44 cents earlier today, rising over 150% with a market cap of almost $50 billion.

But what is Dogecoin? How did it come to be, especially with that name? And how did it suddenly become the Gamestop of cryptocurrencies?

So first, a little history lesson. Dogecoin was created by software engineers Billy Markus and Jackson Palmer in 2013, with the aim of creating an altcoin (Bitcoin alternatives) that was free and easy to use in transactions, but that would also be fun. Their aim was to combine two things taking over the internet, Bitcoin and the “doge” meme, and make a cryptocurrency out of it. The logo of the Dogecoin features the famous “doge,” a (very adorable and mischievous looking) Shiba Inu. 

The currency gained traction quickly after its launch, but its value usually fluctuated around the $0.0002-$0.0004 range. As the years went by and the value of Bitcoin started to stabilize and grow, Dogecoin experienced a slow resurgence. It became one of the most popular altcoins by the end of 2020 as the Bitcoin market has continued to expand and become a more accepted form of financial transactions.

The escalation really hit near the beginning of 2021, as Reddit started boosting the value of Dogecoin. A subreddit called SatoshiStreetBets started heavily investing in and raising the value of Dogecoin, even carrying out transactions using the cryptocurrency. This heavily mirrored the move WallStreetBets made with Gamestop earlier this year, although this came with no express purpose beyond “make currency big.”

Support from people like Elon Musk really drove investment in Dogecoin. Musk regularly tweets cryptically and admiringly about the entire phenomenon, even tweeting at one point, “SpaceX is going to put a literal Dogecoin on the literal moon.” Others like Mark Cuban, Gene Simmons, and Snoop Dogg also started sharing their love for the cryptocurrency, continuing to drive it higher and higher.

Dogecoin is currently at an all time high value, having risen over 7000% in value since the start of the year. While it’s safe to invest in Dogecoin, it’s a risky endeavor that could devolve into a “pump-and-dump scheme,” as financial advisors put it, where the value of a commodity is heavily built up and the ones who do so sell as the rise continues, while those who buy in at the top are left struggling when it drops.

But look at that face.

Want to learn more about some other financial concepts we’ve delved into? Check out our explainer articles about NFTs, BitClout, and the all-important Bitcoin. Do your research and invest wisely!

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