Dogecoin (CRYPTO: DOGE) is going ballistic today.
One Dogecoin is currently worth 64.07 US cents (83.21 Aussie cents). That's up more than 54% over the past 24 hours. It's now gained some 13,828% from the 0.46 US cents it was trading for on 1 January this year.
Boom!
At the current price, Dogecoin – launched in 2013 as a lighthearted alternative to cryptos like Bitcoin (CRYPTO: BTC) – has a market cap north of US$83.2 billion. That makes the once laughed at Dogecoin the 4th largest cryptocurrency in existence. It trails only Bitcoin, Ethereum and Binance Coin.
In a sign of how much investor interest Dogecoin is getting, CoinMarketCap tells me more than US$44 billion of Dogecoin exchanged virtual hands over the past 24 hours.
Which, in turn, led to a few problems.
Image source: Getty Images
Dogecoin crashes Robinhood
With so many retail investors buying and selling Dogecoin, the crypto trading sector of Robinhood's app couldn't take it anymore. The system crash, which Robinhood described as a "partial outage", has since been rectified.
Commenting on the crypto's meteoric price rise, Chad Oviatt, director of investment management at Huntington Private Bank, said (quoted by Bloomberg):
You have money looking for a home and this is one of those areas of the market where there is speculation happening, there is significant appreciation happening in a short period of time. You get that excitement there.
Matt Maley, chief market strategist for Miller Tabak + Co added, "It's pretty amazing that something that started out as a joke has become so popular."
Don't let the joke be on you
Whenever the price of an asset is shooting skywards, it's tempting to join the party. If you get aboard at the right time, that could prove highly profitable. But if you get aboard too late you could lose some or all of your money.
Among those sounding words of caution on Dogecoin and other soaring cryptos is Edward Moya, senior market analyst at Oanda. In a note (sourced from Bloomberg) Moya wrote:
The Dogecoin bubble should have popped by now, but institutional interest is trying to take advantage of this momentum and that could support another push higher. Dogecoin is surging because many cryptocurrency traders do not want to miss out on any buzz that stems from Elon Musk's hosting of Saturday Night Live.
Mike Bailey, director of research at FBB Capital Partners, concurs. According to Bailey:
It seems that investors are careening from one hot dot to another, like a pinball game. My sense is this speculative wave will suffer the same fate as the GME and other Robinhood 'flash-in-the-pan' stocks. Cryptocurrencies may have become a new asset class, like precious metals, but surges such as these seem unsustainable.
With prices broadly surging over the past year, the combined market cap of all the world's cryptocurrencies now exceeds US$2.3 trillion.
