What is DOGE/USD?
Created in 2013 as a playful parody of Bitcoin, Dogecoin (DOGE/USD) is an altcoin and notably, the pioneering "meme coin" and the first dog-themed token. It draws its name and emblem from the widely recognized "Doge" internet meme, characterized by a Shiba Inu dog alongside broken English / humorous? phrases written in Comic Sans font. The logo prominently displays the face of the Shiba Inu.
Initially, Dogecoin was primarily used for tipping content creators on social media platforms. However, it has since expanded its use cases and can be used for online purchases, tipping, and trading on various cryptocurrency exchanges.
Unlike Bitcoin, which has a capped supply of 21 million coins, Dogecoin does not have a maximum supply limit. There is no hard cap on the number of Dogecoins that can be mined, which has led to concerns about inflation. There is however a fixed reward of 10,000 DOGE for each block added to the Dogecoin blockchain that is attributed to miners.
DOGE/USD historical performance
In May 2021, Elon Musk announced that SpaceX will launch the “DOGE-1 Mission to the Moon” in the first quarter of 2022 and that the company will accept the meme-inspired cryptocurrency as full payment for the lunar payload. Musk’s social media support resulted in DOGE soaring 23,000% to $0.74 during that month, declining steeply a few months later.
What affects the price of DOGE/USD?
Being a meme coin, the price of DOGE is affected by a variety of pop culture references and social media buzz.
Its price can spike with endorsements and tweets from influential figures, celebrities, or internet personalities. One of the world’s richest people, Elon Musk, is known for driving the price of dog-themed coins like DOGE and Shiba Inu and fuelling the enthusiasm of the meme coin's online community. A dedicated and active community can drive adoption and generate positive sentiment.
Meme coins often gain popularity through social media platforms, viral videos, and internet memes. Positive or humorous online content related to a meme coin can create buzz and drive up demand, which can lead to price increases.
They are often subject to speculative trading and can experience rapid price fluctuations based on market sentiment. Traders may buy and sell meme coins for short-term gains.
Changes in cryptocurrency regulations and government actions can influence Dogecoin prices. News of regulatory crackdowns or favourable regulations can impact investor sentiment.
What to watch out for when trading DOGE/USD?
Cryptocurrency traders interested in Dogecoin should watch out for the following:
- Social media activity of influential figures like Elon Musk, Mark Cuban, and Snoop Dog.
- Government announcements related to cryptocurrency regulations can significantly impact prices. Positive regulations may boost confidence, while negative regulations can lead to market uncertainty and sell-offs.
- Network Upgrades or changes to the Dogecoin network, like Bitcoin's SegWit upgrade or the implementation of the Dogecoin-Ethereum bridge (Dogethereum).
- Dogecoin's price often correlates with Bitcoin's price movements. Events such as major Bitcoin upgrades, or significant news related to Bitcoin can have a spillover effect on Dogecoin.
- Major Ethereum bull runs or bear declines can also affect Dogecoin prices.