Interest in dogecoin has reached new heights this month, fuelled by staggering price gains and endorsements from the second richest person on the planet.
The cryptocurrency has been around since 2013, created as a “tongue-in-cheek” response to the frenzy surrounding the nascent bitcoin industry, however it still remains relatively difficult to buy.
With a market cap teasing $50 billion (£36bn), traditional investors are beginning to take the joke cryptocurrency much more seriously, while others are hoping to make a quick profit from Elon Musk’s apparent efforts to pump dogecoin’s price “to the Moon” ahead of his Saturday Night Live appearance next month.
Dogecoin is currently trading at around $0.30, making it the world’s sixth most valuable cryptocurrency. Its strongest advocates believe it’s not long before its price hits $1.
Between April 2020 and April 2021, Dogecoin rose from around two tenths of a cent to more than 40 cents – a gain of more than 20,000 per cent. The price surge has been mirrored by online interest in the cryptocurrency over the last year, according to search trend data from Google.
But despite the surge in interest, dogecoin accessibility to investors has not improved compared to more mainstream cryptocurrencies like bitcoin and ethereum (ether).
Leading cryptocurrency exchange Coinbase, which made history earlier this month by becoming a publicly traded company, does not list dogecoin among its cryptocurrencies. It gives no explanation for this and has given no indication that it plans to offer it in the future.
Trading platforms like Robinhood and eToro also don’t support dogecoin purchases, despite growing calls from their users.
There are still a number of well-established cryptocurrency exchanges that offer dogecoin to their customers, most notably Binance, Kraken, OKEx and Uphold.
In explaining its decision to begin listing dogecoin in 2019, OKEx said there was “robust public demand for the asset, despite the fact that it’s a ‘meme coin’.”
Dogecoin’s active Reddit community continues to push for greater adoption among major exchanges, and have offered handy guides for new users to get started with buying, trading and storing the cryptocurrency.
Elon Musk has previously stated his hope of dogecoin becoming the “currency of the internet”, pronouncing himself “The Dogefather”, but its potential as a store-of-value is undermined by its underlying technology.
Dogecoin has no fixed supply, meaning the number of coins in circulation will never cease to increase. By contrast, bitcoin has a finite supply of 21 million units and has therefore been described as a form of “digital gold” among crypto investors.
“Dogecoin may have started as a joke, but it’s succeeded as a peer-to-peer cryptocurrency,” popular exchange Kraken explains on its website.
“That said, there are specifics about how dogecoin’s monetary policy works that may make it more attractive to hobbyists and less appealing to investors focused on long-term portfolio growth.”