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Why Dogecoin is on the rise? Why is Elon Musk on DogeCoin?

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Dogecoin has again grabbed headlines for hitting new record values with an 800% hike in a day through its thriving community of investors.

The world’s richest man, boss of Tesla and SpaceX is endorsing it through tweets.

How is DogeCoin, which was worth about $0.017 putting its total market cap near $2 Bn, now running at $0.074477 reaching a market cap of $9.55 Bn on Jan 28, 2021?

Here’s what happened, exactly! You can watch the detailed explanation on DogeCoin price surge here.

History : 

Dogecoin, co-founded by IBM software engineer Billy Markus, Oregon, and Jackson Palmer, Adobe software engineer, is created for a peer-to-peer digital currency that could reach a broader demographic than Bitcoin. 

It has a logo of Shiba Inu that is based on the popular “doge” meme of 2013. And got over a million visitors to Dogecoin.com just after launching it on December 6, 2013. 

Dogecoin became popular on Reddit and in early 2017, the total market value was $20 Million and by the year-end, it went on to $2 Billion. 

From the last 1 year, the activity is becoming quite good and there are several reasons behind this increase inactivity.

The two main reasons behind this Dogecoin’s price surge are Elon Musk and Reddit Users.

Elon Musk - the market mover: 

Elon Musk is tweeting in favour of Dogecoin these days and you could agree to this or not, but this man can move the markets with his tweets.

You could have seen it in the cases of Signal and GameStop. There is a huge hike in their share prices following his tweets.

Musk’s Tweets on DogeCoin:

Tweet

Another reason for DogeCoin’s price hike:

Reddit Users:

Two Reddit groups, Wall Street Bets and Satoshi Street Bets. And the target of these groups is to make Dogecoin’s price reach $1 per coin. 

Now, the price is running at $0.074477 and their target is to get this to $1. And for this, they formed a community and by being together, they are buying the DogeCoin.

Along with that, they are planning not to sell it until it reaches $1.  

Why Do People Invest in DogeCoin?

People are not taking Dogecoin as an investment avenue but as a community. People who purchased DogeCoin, forming a community and this community is taking some initiatives like the Jamaican Bobsleigh Team, qualified for the winter Olympics but to participate in it, they do not have enough money. The DogeCoin community extended its support by donating $50,000 and made them go to the Winter Olympics. They helped the other players of the Winter Olympics.

They even raised $55,000 to sponsor a NASCAR driver.

For countries like Kenya, where there is huge water scarcity, they provide their support by taking some initiatives to resolve the issues.

Hence, DogeCoin Community helping in fundraising activities and helping to resolve social issues. 

There is a second face for everything that is something not so good to talk about.

Some People take this for their benefits. Alex Green, whose real name is Ryan Kennedy, started donating some big amount and became quite a big name in the community. 

Alex Green said to the people that he is planning to build an exchange that takes 2-4 Million Dollars and he got the stated amount through DogeCoin Community. And later this came out to be a big scam that created so many investors' losses.

In this meantime, DogeCoin acted as a source to commit scams and give chance to use it for wrong purposes that made Jackson Palmer, one of the creators of DogeCoin, maintain some space from DogeCoin.

Problems with DogeCoin :

The main problem with Dogecoin is the supply for this is so huge that at present, 100Bn DogeCoins are available and will add 500Bn coins every year.

If we talk about Bitcoin, the supply is limited to 21 Million Bitcoins. 

Another reason is that there has been no software upgrade for DogeCoin, for many years.

Apart from the technology upgrade, the technology that is used to build the dogecoin is not at all new and Bitcoin wins in terms of coping up with the new technology.

Conclusion: 

DogeCoin is more to a community than investments and when this bandwagon finishes, the price is going to fall just like it happened with the Game Stop.

Also, check on how ElonMusk brought on the GameStop Stock price surge here.

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author

Navitha