Dogecoin, the currency that began as a joke and is now worth billions
Think GameStop is wild? Meet the meme-inspired crypto token that just spiked again thanks to a series of cryptic tweets by Elon Musk.
John KeilmanUpdated Feb 5, 2021 – 8.12am,first published at 8.07amChicago | For a minute there, it looked like Ronny Maali had struck it rich – relatively speaking.
The accounting student from Orland Park, Illinois, last year bought more than 1000 Dogecoins, a digital currency that was created as a joke. Maali thought it was pretty funny too: With each Dogecoin trading for well under a penny, his investment cost him only $US2.50, less than the price of a Big Mac.
But last week, as social media-inspired speculation lifted the stock prices of widely belittled companies like GameStop and BlackBerry to dazzling heights, Dogecoin went along for the ride: In 24 hours, its value rose from less than a cent to nearly 8 cents – an increase of more than 900 per cent that took its market cap to $US9 billion ($11.8 billion).
Maali, tracking the wild ride on his phone, bought a further $US20 worth on the way up and watched in amazement as the value of his pocket money investment hit $US140.
“When it started rocketing and these guys on [social media platform] Reddit were pushing it, I was like, ‘This is awesome,’” he said.
As with other hot investments, though, the rise was swiftly followed by a plunge. Within another 24 hours, Dogecoin fell to 3 cents, where it hovered until a Thursday morning rally, sparked by a series of cryptic tweets from Dogecoin provocateur Elon Musk, spiked the price once more. The value of Maali’s holdings is down from its peak, but despite the continuing volatility he’s still way ahead.
“[Dogecoin] wasn’t meant to be taken seriously,” he said. “But I was like, ‘Who knows?’ Maybe someday I’ll wake up and it’ll be the next Bitcoin and I can tell my parents I’m a millionaire.”
A world gone mad
In a world gone mad with a pandemic and social upheaval, cryptocurrencies are having a moment. Created out of thin air – or, to be more precise, “mined” by computers as a reward for recording the currencies’ transactions – they are not backed by central banks or tangible assets, but get their value from the wisdom of the crowd.
