Crypto professionals see the token as a distraction from the goals of decentralizing currencies and revolutionizing modern finance.
The dogecoin frenzy reaches its peak, just hours before Elon Musk's debut as host of the popular Saturday Night Live TV show, as speculation rises that the Tesla mogul will speak out. to a massive audience of its dear cryptocurrency.
Dogecoin is the investment bet of the day, with a meteoric rise in the value of the token to 60 cents on the dollar, resulting in a market value of $ 80 billion.
In contrast, the value of COINBASE Global, America's largest digital asset exchange platform, fell to an all-time low on Thursday, in part because it does not offer enough speculative coins like Dogecoin. And Robinhood, a trading app that offers the token, regained number one spot in Apple's US App Store.
While the meteoric rise of Dogecoin only follows in the wake of Bitcoin, crypto purists fear that it will distract them from their grand project of implementing blockchain technology to revolutionize modern finance, whether it be. acts to replace decentralized currencies.
For those trying to lure large sums of money into the financial industry with old-fashioned risk controls, memecoin does not help institutions take cryptocurrencies seriously when it is too risky for portfolios.
At BKCoin Capital, a $ 60 million quantitative fund, founding director Kevin Kang told Bloomberg that Dogecoin was off limits.
“It could very well be a 'news sell-off' type event where big shareholders sell ahead of its appearance on Saturday Night Live to leave retail investors with the losses,” Kang wrote in an email. referring to Musk's public appearance on television. “There is nothing beyond this speculative asset, there are no developers in it and we have not seen 'smart money' or institutional investors allocate,” he added..
CREATED LIKE A JOKE WITH THE SHIBA INU DOG BREED AS A LOGO, THE MEMS-INSPIRED TOKEN LOOKS MORE FUN AND ATTRACTIVE THAN BITCOIN TO NEW INVESTORS.
Bitwise Asset Management did not include the token in a $ 1.1 billion index fund that captures the performance of the ten largest cryptocurrencies, although Dogecoin has now climbed several positions and is the fourth largest issue. digital world in terms of market value.
Before Gemini, a cryptocurrency company founded by the Winklevoss twins, announced Tuesday that it would back the coin, none of Bitwise's custodians wanted to touch Dogecoin. This meant the company couldn't guarantee that its holdings were safe for its more conservative clients.
“There are fears that its dramatic rise may suggest the market is somehow overheating,” Matt Hougan, an exchange-traded funds expert who is now Bitwise's chief investment officer, told Bloomberg. “As a quarter of the internet community wants Dogecoin to exist and be used among them, I find that magnificent. But I don't think that threatens the global institutional scale of bitcoin, ”he explained.
BLOCKCHAIN ??EXPERTS BELIEVE THAT THE MEMECOIN PHENOMENON DOES NOT HELP INSTITUTIONS TAKE CRYPTO-CURRENCIES SERIOUSLY
Dogecoin has jumped nearly 100% over the past week, according to data from Coinmarketcap, a move widely seen as the epitome of a speculative frenzy spurred by massive stimulus spending and social media chatter. During the same period, bitcoin has increased by 4%.
Differences between Bitcoin and Dogecoin
While to an untrained investor these two cryptocurrencies may seem like new excesses, token analysts know they have some fundamental distinctions.
While bitcoin pioneered blockchain technology, dogecoin is just an offshoot of this trend. In the latter case, there is also little encryption activity, which is a sign of stagnation. Unlike bitcoin, the supply is not limited and there are still relatively few transactions in dogecoin, a symptom of its predominantly speculative nature.
“There are question marks about the general state of software around Dogecoin,” Konstantin Richter, CEO and founder of Blockdaemon, a blockchain infrastructure provider, told Bloomberg. “He will catch up. If Doge is very valuable and people can make money by building apps on it, they will, ”he noted.
In some cases, the doge craze can inspire practical use. Mark Cuban, billionaire Dallas Mavericks owner and dogecoin promoter, said Thursday at the Ethereal Summit that the basketball team has sold more goods in Dogecoin than they have in years with bitcoin.
