A doge’s breakfast? The popular cryptoasset dogecoin, designed as a joke in 2013, has crashed for the past week after hitting a record high on Monday, leaving few investors laughing. Dogecoin, at the last check, was trading at 0.06784 cents, down 20% from its February 7 all-time high of 0.087159, according to data from CoinDesk. That decline meets the criteria commonly used among Wall Street chart watchers and technical analysts for a bear market.
“‘People are moving the markets in droves and fooling around with each other without understanding the ramifications or their own psychological limitations.’ ”- Charles Hayter, CEO of London-based research site CryptoCompare
The Doge rally began in the wake of a series of bullish, albeit sometimes cryptic, tweets from Tesla Inc. TSLA, + 0.14% from CEO Elon Musk. Several celebrities, including Calvin Broadus, aka Snoop Dogg, and Gene Simmons of the rock band Kiss, joined Musk, as well as billionaire investor Mark Cuban, have been tweeting about investing in dogecoin. On Reddit’s popular SatoshiStreetBets chat forum, some expressed the hope of pushing the value of dogecoins to $ 1. However, crypto experts have warned that dogecoin, pronounced “dōj-coin” and commonly associated with a popular meme. featuring a shiba inu dog, has limited utility compared to other decentralized crypto assets, including bitcoin. Dogecoin co-founder Billy Markus told The Wall Street Journal in an article in early February that he created the asset in 2012 as a “jolly cryptocurrency,” then known as Bells, to serve as the fun version of bitcoin. Nic Carter, a cryptocurrency and blockchain venture capitalist who founded Castle Island Ventures, on CNBC earlier in the week warned that average investors could be seriously harmed by making speculative bets on an asset with no real purpose. He also found it strange that Musk supported the virtual asset. “It’s kind of disconcerting to see Elon Musk so excited about this,” said the Castle Island co-founder. Bullish bitcoin investors argue that price gains in bitcoin, the world’s number one cryptocurrency, are supported by the limited supply of cryptocurrencies that is inherent in its code. Only 21 million bitcoins will exist, and so-called bitcoin mining, or solving complex computational problems that are rewarded by bitcoins, becomes more difficult as time goes on. The final bitcoin cache is likely not mined until around 2140. The supply of dogecoin, on the other hand, does not have a built-in limit, and the number of dogecoin that can be mined at any given time varies by one. hundreds of thousands. Nonetheless, the interest in dogecoins underscores the appetite for alternative assets in an environment where 0% interest rates prevail as governments around the world try to mitigate the economic damage from the COVID-19 pandemic. Charles Hayter, CEO of London-based research site CryptoCompare, told MarketWatch earlier this week that investors should exercise caution with investments like dogecoin. “People are moving the markets en masse and fooling around with each other without understanding the ramifications or their own psychological limitations.