TikTok traders are pumping joke cryptocurrency Dogecoin—and the price is up 95%
Wow. So pump. Much buy.
Day traders on viral video app TikTok are encouraging people to speculate on a joke cryptocurrency called Dogecoin. Based on an old Internet meme—an overly sincere and whimsically grammar-challenged Shiba Inu—the digital coin was developed as a Bitcoin spinoff in 2013, after which it quickly rose to prominence as a gag.
The shenanigans of the cryptocurrency-pumpers appear to be working, at least for now. The price of Dogecoin has nearly doubled since July 6, rising 95% to $0.00448 from $0.0023, according to data from OnChainFX, a cryptocurrency data tracker.
The price of Dogecoin peaked in January 2018 at $0.013 before promptly crashing.
The Dogecoin TikTok challenge
It appears a flood of stuck-at-home market hypers is behind the push to hype the cryptocurrency.
TikTok user @jamezg97 uploaded one of the earliest Dogecoin-pumping TikTok videos related to the current bonanza in late June. “If this ever hit a dollar I’d be loaded. Everyone invest so we can all get rich,” he wrote.
The pumping has amplified since. In a more recent video, which racked up nearly 800,000 views since its upload last week, @jamezg97 walks his audience through the math of the speculative bet.
“Let’s all get rich,” he tells would-be cryptocurrency buyers. “Dogecoin is practically worthless. There are 800 million TikTok users. Invest just $25. Once the stock hits one dollar you’ll have 10-grand.”
At the end of the video, a Shiba Inu rides a rocket ship set on a price chart that indicates a rapid accumulation of riches. Then there’s a clip of Squidward, a curmudgeonly character from the Nickelodeon TV show SpongeBob SquarePants, rolling on his back, incanting “future.”
The Dogecoin account itself urged caution. “Be mindful of the intentions people have when they direct you to buy things,” the administrator wrote in a post on Twitter. “None of them are in the spot to be financially advising. Make choices right for you, do not ride other peoples FOMO or manipulation. Stay safe. Be smart.”
Git along little Dogees
In the zany world of cryptocurrency, Dogecoin could be considered the equivalent of a junk penny stock.
That hasn’t stopped get-rich-quick thumpers from promoting the gamble. Boosters believe if they can persuade enough people to buy in, then they can sell out for a profit before the price comes tumbling back down.
It is a classic game of speculation, or pump-and-dumping. Buy low, manipulate the price upward, sell, and leave some other sucker “holding the bag,” as it were.
Unlike Bitcoin, Dogecoin has no cap on its supply. There is no limit to the number of Dogecoins that can enter the market, a feature that practically guarantees inflation, meaning each Dogecoin will generally be worth less over time.
At press time, there were more than 125 billion Dogecoin on the market, with 10,000 more entering every minute on average. The large and constantly increasing supply of Dogecoin has a tendency to dampen the price action of speculators.
For comparison, there were 18 million Bitcoins on the market out of a total possible 21 million Bitcoins at press time. Six-and-a-quarter Bitcoins enter the market every 10 minutes or so, a rate that is programmed to halve every four years until the last Bitcoins are “mined” in the year 2140.
Proponents of “value investing,” a philosophy espoused by Warren Buffett, its foremost practitioner, might offer this bit of advice to anyone considering Dogecoin as an investment: Better get the hell outta Doge.