The hype on social media caused the Dogecoin to rise 900 percent. Although this leap did not last long, it showed us the power of social media in streamlining.
One of the most surprising developments in the digital currency market in recent days has been the record low growth of Dogecoin, which has risen in price almost tenfold in 24 hours. Dogecoin can be considered the best digital currency, MemeCoin, which is once again making headlines due to the hype on social media. Meem or Meem Quinn digital currencies are based on the satirical idea that has been popular on the Internet for some time and then turned into a digital currency. Continued with reference to an essay Published on the Coin Telegraph website, we look at the reason for the strange growth of this digital currency and the impact of social media on it.
Anyone who has been active in the digital currency space for the past few years is no doubt familiar with Dogecoin, the acronym DOGE, and of course the impact of social media activity on its price. This digital currency, known as the “fork of a fork”, has been created on the Litecoin (Bitcoin Fork) platform and has been able to gain numerous fans and unique credit in the digital currency space.
Unlike other projects, Dogecoin has not seen any upgrades or improvements to the protocol since 2015. In fact, Dogecoin’s success is rooted more in the efforts of the digital currency community and the power of the Meem Coins than in technical endeavors.
However, it cannot be said that this “digital currency” has no use. In fact, Dogecoin was first used to offer very small-scale rewards for producing content on social media. Dogecoin was one of the first examples of how digital currencies could be used to monetize content production space. Instead of the usual “likes” and by offering rewards in the form of real money dollars, the people who share in the forums will be given more attention and their activity will continue with more seriousness and impact.
Members of the Dogecoin community have been so involved and influential that the token holders were able to sponsor NASCAR driver Josh Wise in the 2014 Jamaican Ski Race and Winter Sled Team.
Where did the Dogecoin affair begin?
For the first time since 2015, Dogecoin was among the top 10 digital currencies on the market for a short time, for the first time since 2015, with an astonishing rise and almost tenfold growth. It all started when small traders blocked the way for small traders to buy shares of companies such as GameStop and AMC on Thursday, following a wave of challenging social media conversations.
At the time, the large group of small traders who formed the Wallstreetbets group on the Reddit platform apparently surprised and changed the strategy of one of the hedge funds, which entered the short position (sell) by increasing the buying pressure of stocks. ) have been. After the hedge fund suffered losses, while small brokers suspended GameStop and some other stocks in order to balance the trading market, some Reddit users turned their unbridled trading energy to Dogecoin.
On Thursday, a Twitter user with the username “WSB Chairman” asked his 750,000 followers:
Has Dogecoin ever reached the price of a dollar?
Following this tweet, a storm started on social media and Dogecoin became the first Quinn tool, the use of its name in daily tweets exceeded this amount for Bitcoin.
Joshua Frank, co-founder and CEO of The Tie Digital Currency Research Company, said in an interview about the link between social media activity and Dogecoin price movements:
Everyone around the world agrees that no one invests in Dogecoin’s “fundamental” foundations. Because Dogecoin enjoys significant support on various social media platforms, its price reacts strongly to the issues raised on these networks. We have also found that increasing support for Dogecoin is periodic; Sometimes for days or weeks in a row, this honeymoon is on the rise and many small customers are investing in it.
The rise in Dogecoin coincided with a sudden increase in activity in the digital currency space, with exchanges such as Bainance announcing the opening of a flood of new accounts. In fact, several exchanges saw a significant reduction in the size of the coin and stopped Dodge Coin withdrawals.
Changpeng Zhao, CEO of Bainance Exchange, also examined the relationship between the hot social media debates and the Dogecoin price and said in an interview:
With a market value of $ 7 billion, the Dogecoin is arguably the most successful joke in history. Born of a joke, Dogecoin has now become an attractive target for various groups on social media. This currency is relatively smaller than other top digital currencies, but with more awareness, it is easier to launch a campaign or social movement and will have an immediate and major impact on price.
Dogecoin service disruption caused a 50% drop in price. However, social media sentiment is still raging, and many social media activists are looking to reach $ 0.10 in the short term.
Dogecoin needs a 2,000 percent price increase to reach the $ 1 target set by user Vsby Chirman. In addition, Dodge Coin’s 24-hour trading volume in Bainance crossed the $ 5 billion mark for the first time, surpassing the bitcoin trading activity on the platform.
Dogecoin’s price increase is not unprecedented
Despite the current craze for Dogecoin, this is not the first time that social media conversations have caused a stir in the popular Meem Quinn market. In fact, all the excitement about memes is based on “joke engineering” and the emerging joke-based economy. Memetic engineering is the attempt to spread jokes consciously and in order to change the behavior of people in society.
In 2020, Tesla CEO Elon Musk mentioned Dogecoin in two separate tweets, raising the price of the token in both cases. Last year, in a Twitter poll to decide who should be the CEO of Dogecoin, Ilan Musk came in first. Tesla’s CEO later referred to himself as “Dogecoin’s former CEO.”
The effect of masks on the price performance of digital currencies is not limited to Dogecoin. After the bio Musk changed its Twitter to “bitcoin” on Friday, bitcoin also experienced a significant leap.
Just like the Dodge Coin case in 2020, the Bitcoin flag Musk was raised again to grow the king of digital currencies to more than $ 5,000 in a matter of minutes, and for the first time since mid-January, above $ 38,000. Go.
Following Musk, other prominent fans of digital currencies, both inside and outside the industry, including participants in the wider technology and social media space, became the flagship of Bitcoin. Reddit co-founder and co-founder Alexis Ohanian, as well as Ethereum co-founder and CEO Jack Dorsey, joined Twitter by changing their Twitter bio to “Bitcoin.”
In addition to Musk, an ubiquitous campaign was launched on the TikTok video sharing service to push Dogecoin’s price upward. In fact, Dogecoin managed to use the hype created by the fast-paced movies to reach its highest level in two years.
Asset valuation in the age of social networks
GameStop’s controversial story once again underscores the argument of the efficient market hypothesis that stock prices reflect fair market value. In fact, small traders used the available public information to conclude that the massive acquisition of GameStop stock could hurt the hedge funds that entered short positions and reduce their ability to influence the market.
From the point of view of this hypothesis, such conditions (gaining more returns than normal market returns) are only a matter of chance and not another factor. However, in the modern age of social media, these concepts are now increasingly being challenged by a group of reckless people who seem to benefit from the situation.
For Aaron Khoo, a senior executive at CoinMarketCap, the Dogecoin leap represents an increase in awareness among small investors. Xu said in an interview:
Just like the buying pressure for GameStop shares, Dogecoin’s rise is an extraordinary example of the human psychological tendency to ridicule; Some deconstructors wanted to make a statement that seemingly reputable Wall Street hedge funds had no right to change or formally declare the fair value of an asset.
Dogecoin is still in the green in terms of 24-hour price performance; Crossing $ 0.08, this mem coin has been able to break its previous records and become one of the few altcoins that have surpassed its 2018 price record. At the time of this writing, Dogecoin has experienced a price drop of more than 59%.
It is widely believed that the rise in the price of Dogecoin signals the beginning of another “Altcoin season”. In fact, given the nature of the Dodge Coin price movement cycle, the reversal of the Dodge Coin-Bitcoin chart (Dodge Coin growth and Bitcoin retreat) could signal the beginning of a period of rising coin market prices.
The reason is quite simple; The increase in the price of Dodge Coin depends solely on the presence and activity of small traders on social networks, which often leads to an increase in the price of this Dum Coin. This fear of losing ground among small traders often spreads to other coin operators as well.
However, the fatigue caused by the growth period in the bitcoin space can also be another factor in the beginning of the penis season. For now, it looks like Bitcoin still has the fuel to continue; Therefore, the market still has to wait for the next events. In addition, older coins have to cope with the pressures of a decentralized financial environment, popular coins that have found their place among digital currency investors.