Dogecoin — the crypto token that was started as a joke and that is the favourite of Elon Musk — is having a bit of a moment. And when we say a bit of a moment, we mean that it is on a lunar trajectory (in crypto talk: it is going to da moon).
At the time of writing this, it is up over 200 per cent in the past 24 hours — more than tripling in value (for those of you who need help on percentages, it is Friday afternoon after all). Over the past week it’s up more than 550 per cent (almost seven times higher!).
Here’s a chart to show you what that looks like (thanks to Jamie “Spreadsheet”/”Loves A Good Pun” Powell for drawing it up):
So what’s going on? Well we did a quick inbox search — when bitcoin is mooning we are always inundated with “expert analysis” from shills. But it seems the usual suspects aren’t quite sure what to say — maybe they feel the big serious talk they usually do about crypto would look a bit silly given that this was designed solely for the LOLs? So there was literally nothing to be heard from the usually loud voices of bro-dom. And we know what they think of Doge already:
Why do people have to be so cynical??
Instead we got this from David Kimberley, at Freetrade, who is very much on the money (we started bolding bits of this but there was too much to bold so just read all of it!):
Dogecoin’s rise is a classic example of greater fool theory at play, Dogecoin investors are basically betting they’ll be able to cash out by selling to the next person wanting to invest. People are buying the cryptocurrency, not because they think it has any meaningful value, but because they hope others will pile in, push the price up and then they can sell off and make a quick buck.
But when everyone is doing this, the bubble eventually has to burst and you’re going to be left short-changed if you don’t get out in time. And it’s almost impossible to say when that’s going to happen.
This is doubly the case in the crypto markets where a small group of players often hold a huge chunk of the total number of ‘coins’ in circulation. That means it only takes one person to dump all their holdings for the entire market to tank.
The latest uptick in Dogecoin’s price isn’t indicative of any meaningful value the cryptocurrency offers, it’s just a surge in interest from people looking to get rich quick. That can make for a fun bet, but it’s not good investing. And if you’re the one left holding on to the coins when the market tanks, you may regret taking a punt in the first place.
The good thing about that commentary is that you can replace Dogecoin with bitcoin, or basically any other crypto token under the, er, moon. (And there are many of them — Coinmarketcap currently lists 9,262 individual coins.)
There are just two other things that Kimberley misses really. One is the LOL factor. The entertainment element in all of this should not be dismissed, as the great former Alphavillain Kadhim Shubber wrote back in 2018.
The second, very much related to the first, is the Musk factor. On Thursday the electric car king jester tweeted this:
So there you have it. The explanation for these crazy price moves you’ve been looking for: greater fool theory + I’m gonna buy some Doge for the LOLs + OMG Elon tweeted about it again, wen lambo = number go up.
If you’ve ever wondered how to say Dogecoin but were too afraid to ask — especially if you wondered how you might do that with a light French accent — well here you go:
Our Dear Leader Kaminska called it “Doggycoin” on Clubhouse yesterday so we thought we’d better clear that up once and for all, particularly if you fancied bringing it up when you’re shivering outside the pub on a Hinge date tonight.
But if you do bring it up, why not make the argument that LOL should be just as sound an investment strategy as, say, ESG? It’s certainly a lot more fun, and probably more consistent. After all, in the era of kayfabe, it makes perfect sense.
R.E.M. – Man on the Moon
Elon Musk is moving the market with joke-tweets about a joke-coin – FT Alphaville
The entertainment value of bitcoin – FT Alphaville
Elon Musk reveals his favourite cryptocurrency – FT Alphaville