Dogecoin’s original purpose for creation was a joke for crypto enthusiasts and it took its name from a once-popular meme. However, it has exploded in popularity in 2021. It has become the fifth-largest cryptocurrency by market capitalization. A meme-based cryptocurrency has a 2021 return above 8,100%, more than double the gains on the S&P 500.
The cryptocurrency’s surge is the latest act of financial alchemy by rapidly moving individual investors who have used access to no-fee trading platforms. Moreover, a wave of government stimulus money to transform markets over the past year also played a big role.
Dogecoin has a market capitalization of nearly $40 billion, which is comparable to that of auto giant Ford. The trading volume of $22 billion in the last 24 hours exceeds Wall Street heavy hitters like Apple and its $13 billion daily trading volume.
The cryptocurrency’s rise is reminiscent of GameStop Corp.’s stunning rise earlier in 2021, an episode in which traders were congregating on Reddit and other social-media platforms made a past-prime mall retailer into a stock-market superpower.
Dogecoin is up about 6,500% so far in 2021
Dogecoin owners have enjoyed a parabolic surge in Dogecoin that was created in 2013. It is up about 6,500% so far in 2021. By comparison, gold futures are down some 5.5% in 2021. Meanwhile, the Dow Jones Industrial Average and the S&P 500 are both up by about 11%.
Moreover, $1,000 invested in dogecoin at the start of the year would be worth more than $57,000, based on MarketWatch’s calculation of a starting price of 0.005405 cent for dogecoin and a nearly 31 cent trading price now.
Furthermore, it’s essential to mention that Bitcoin has a supply limit. No coins can ever be added over 21 million, so it is considered a good store of value. However, Dogecoin is inflationary and has no supply limit. Each minute, 10,000 Dogecoin is added into the network. At this rate, miners add over 5 billion coins per year.