Dogecoin (DOGE), initially a parody coin that was named after an internet meme using the Shiba Inu dog, recently hit a new all-time high. According to data from Cryptocompare, Dogecoin recently surpassed $0.015 per token. Its recent rise elevated its market cap to $1.7 billion, and the cryptocurrency’s creator believes it is a sign of current market excess.
A closer look at Dogecoin’s price reveals the cryptocurrency surged a whopping 1,400% in the last three months. This is an impressive achievement given that it hasn’t released a software update in over two years, according to its creator.
Jackson Palmer, the man who founded Dogecoin and then left it in 2015, pointed out that the cryptocurrency hitting new heights reveals a lot about the current state of the cryptocurrency ecosystem, which has recently seen penny cryptos hit billion-dollar valuations in a matter of weeks. Despite having faith in the Dogecoin Core development team to keep the currency safe and stable, he noted that focusing on investment potential is worrying.
“The fact that most conversations happening in the media and between peers focus on the investment potential is worrying, as it draws attention away from the underlying technology and goals this movement was based [on]”
Dogecoin’s developers also weighted in on the currency’s progress. Patrick Lodder argued the bull-run shows the industry is currently bypassing fundamental considerations. To him, it proves a cryptocurrency doesn’t “need shiny features or a ton of innovation,” and that even with a conservative development team it can boom.
Max Keller, another developer, made it clear he was surprised, but also noted it can be scary to work on a software that, now, powers a billion-dollar network.
Why did Dogecoin surge?
The motives behind Dogecoin’s surge even seem to baffle its developers. Given that Palmer himself admits there weren’t any new software updates in over two years, there’s seemingly no reason for the cryptocurrency to hit a new all-time high now. If we take into account that it was at seemingly forgotten these two years, it just looks like a pump and dump is occurring.
Speaking to CNBC Dave Chapman, the managing director of Octagon Strategy, a commodities and digital assets trading house, offered an explanation. According to Chapman, altcoins like Dogecoin are currently rising due to the perception of being “cheap coins.” Per his words, new investors have a specific mindset regarding cryptocurrencies, as they feel they’ve missed the “upside opportunity” with established cryptocurrencies like bitcoin.
“The two most well known cryptocurrencies (i.e. bitcoin and ethereum) are considered too expensive for most new entrants. Despite being able to purchase a fraction of each, there is a real psychological barrier around owning something in its entirety.”