Although Bitcoin and Ether are far and away the largest digital currencies, with a combined value of $1.4 trillion, a podium position is now within reach for Dogecoin. If the value of the token continues to grow at such a ferocious pace, the currency will soon displace third-placed Binance Coin, worth $99 billion.
With this latest surge, Dogecoin is now up by more than 13,600% year-to-date, easily outstripping all other cryptocurrencies, including Bitcoin (+90%) and Ether (+357%).
Launched in 2013 by IBM developer Billy Markus and Adobe data scientist Jackson Palmer, Dogecoin was supposed to satirize the online frenzy surrounding cryptocurrencies at the time.
Since then, however, it has become a cult symbol embraced by a loyal and increasingly large following. The currency has also been endorsed by a variety of celebrities, such as Snoop Dogg, Gene Simmons and, most notably, Elon Musk.
Dogecoin critics, of which there are plenty, claim the extreme rise in value is completely detached from any feasible real-world value, dictated by the actions of a prominent minority on social media and a desire to cash in on the crypto bull run.
Others suggest Dogecoin is balanced precariously, with almost 65% of tokens held by just 98 wallets (with the largest wallet holding 28%). The concentration of supply in just a few hands creates a situation in which a sell-off could see the price of Dogecoin collapse in on itself, wiping billions of dollars from the market.
However, a new report from Galaxy Digital Research, based on analysis of on-chain metrics, suggests Dogecoin has “remarkably strong fundamentals and powerful forces supporting its rise”. Entitled “Dogecoin: The most honest sh*tcoin”, the report asserts that the real value of Dogecoin is in the complete lack of pretence.
“Unlike many other cryptocurrency projects, Dogecoin does not seek, or even pretend, to be anything more than the world’s most fun currency,” the report states. “There’s no grand vision, no pronouncements about how Dogecoin will change the world.”
“It is a goal that seems too good to be true, one that you would assume comes with a hidden agenda. But with no pre-mine or ICO, Dogecoin’s fair launch ensures that no hidden group of insiders stands to benefit disproportionately from its rise.”
Despite its various deficiencies, a simple vision detached from agenda has allowed Dogecoin to become the focal point of a cultural movement. As Alex Thorn, Head of Research at Galaxy, puts it: “Dogecoin has always been a joke, and the joke just keeps getting funnier”.