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The cryptocurrency based on a popular doge meme has surged nearly 418% in a week, making it worth almost $41 billion. Although the currency was started as a joke, it now has become the seventh-largest cryptocurrency in market capitalization. The current market price of DOGE is $0.323 after an increase of nearly 27% over 24-hours.
The one reason why DOGE is rallying could be the Coinbase listing. The exchange platform went public recently, hitting a market cap of $100 billion. It led to a surge in the prices of many cryptocurrencies, including Ether and Bitcoin. Another factor that could be considered is its support by Tesla’s CEO Elon Musk. Musk’s various tweets about Dogecoin have helped in pushing up its price. Even on Thursday, he tweeted, saying, "Doge barking at the moon".
This year, Elon Musk sparked a Dogecoin rally with his tweets that gripped the market in February. People’s interest in cryptocurrencies is on the rise again after many companies enabled the transactions in Bitcoin on their systems. The surge in DOGE’s price is due to the rise in altcoins that have emerged up imitating Bitcoin.
Notably, Dogecoin is a cryptocurrency that was started in 2013 as a joke by two software engineers. Since its launch, it has marked an impressive increase in value. Investors have made a tremendous amount of money by buying Dogecoin, and it also doesn't seem a bad idea to invest a small sum of money in it because its price is continuously rising.
But, its skyrocketing price has led to a potential bubble in the crypto market. Investors are buying it not because of its value but because they are feared that its price will rise due to its piling up the other investors. People want to sell it off and make quick huge money when its prices rise further. But when everything is doing the same, the bubble will burst eventually. Indeed it cannot be predicted when exactly it will happen.
Due to Elon Musk and Reddit, Dogecoin's value has increased dramatically. But we know that it is the hype that makes any crypto volatile, i.e., the hype can continue until the people see potential losses, and when it dies, money goes with it. Because the prices can never be predicted accurately, one should constantly assess the risk associated with the investment.