Local traders are taking a shine to the relatively obscure cryptocurrency Doge Coin, which has become the latest hot item among retail investors.
The value of the digital asset has soared more than 800 percent in the past month to about 58 US cents a coin.
Doge Coin get its name from a popular internet meme and was created as a joke in 2013 and had typically been used as a way to tip content creators online.
It is unique from other crypto assets, as it is regarded as a much faster and cheaper way to send value along a cryptocurrency network and it is inflationary, meaning that the supply of Doge Coin is not capped and can increase over time.
Janine Grainger, the chief executive of cryptocurrency marketplace Easy Crypto, said recent interest had been fuelled by publicity campaigns from the Doge Coin community and recent tweets by Tesla-founder Elon Musk.
She said the hype around the asset was resonating with local investors.
“We’re seeing a huge uptick in Doge Coin sales and particularly to first time investors, the people new to our platform.”
Easy Crypto sells 146 different cryptocurrencies on its platforms and typically Doge Coin would account for less than 1 percent of all trades, Graigner said.
“But this year Doge has really boomed….and for our last 30 days we’ve had 10 percent of our transactions been in Doge Coin which is phenomenal, that’s a really big increase from less than 1 percent.”
Although, she said it remained to be seen if Doge Coin would garner the same level of legitimacy that other cryptocurrencies such as Bitcoin had attained.
A new fad?
In many analysts eyes, Doge Coin had become the latest fad for a new breed of retail investors, who rose to prominence last year when they banded together to execute a short squeeze of Game Stop shares which cost some Wall Street hedge funds billions of dollars.
Grainger raised questions about the role of Elon Musk, arguably Doge Coin’s most famous supporter, had in boosting the profile of the asset among retail traders.
SNL May 8
— Elon Musk (@elonmusk) April 28, 2021
Musk, who had nicknamed himself “The Dogefather”, has regularly quipped about Doge on his Twitter profile and suggested investors should buy the coin and send “its price to the moon.”
It is not known if Musk invests in the cryptocurrency, but his past comments about Game Stop shares and Bitcoin have demonstrated his ability to move a whole market with a single tweet.
“With the way these markets work, it’s a free market and anyone can say anything they like and if they happen to have the power to really influence the market, it’s not insider trading per se, but it is something, I would assume, would cause concern for regulators around that ability to manipulate pricing,” Grainger said.
All eyes will be on Musk’s appearance on the US television show Saturday Night Live this weekend, after a tongue and cheek tweet he made last week.
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