How Dogecoin rose from meme to major cryptocurrency

The wildly volatile "joke" coin is up some 6,000% in 2021 and has big fans in Elon Musk and Mark Cuban. How did this happen?

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Cryptocurrency enthusiasts and blockchain backers see serious potential for top coins like Bitcoin and Ethereum, which could upend traditional financial systems and impact a wide array of industries.

But there's almost nothing serious about Dogecoin (CRYPTO: DOGE), a so-called "joke" coin that was inspired by a meme of a Shiba Inu dog. Actually, there is one serious detail: the price gains that Dogecoin has experienced so far in 2021. Dogecoin started the year at less than a penny per coin before surging in late January, as a byproduct of the meme stock trend that impacted GameStop, AMC, and others.

But Dogecoin hasn't backed down: it reached a high above $0.73 in May amid the most recent bull run. While it's currently off that mark by over 50% amid wider crypto market declines, Dogecoin's price still sits about 60 times higher than it did on January 1 and it has high-profile advocates nudging it forward. Here's a brief look at how Dogecoin became much more than just a meme.

A New Breed

Dogecoin's origins are a joke. Inspired by the famous Doge meme and the early rise of a nascent Bitcoin in 2013, Adobe software engineer Jackson Palmer posited the idea of Dogecoin as satire. Palmer's idea was put into action when he partnered with IBM software engineer Billy Markus soon after, with Dogecoin's code based on the existing cryptocurrency Litecoin.

Dogecoin investors embraced the goofiness and offbeat origins of the coin, with community members raising money to sponsor a NASCAR vehicle and send the Jamaican bobsled team to the Winter Olympics in 2014. In the years that followed, Dogecoin largely languished on the fringes of the crypto market with a price at a fraction of a penny. After all, it was designed as a joke. It was never really going to be worth anything, right?

In summer 2020, Dogecoin began to earn more attention on social media, including from Tesla and SpaceX CEO Elon Musk as well as YouTube star Jake Paul. Attempts to pump the price up to $1 per coin didn't pan out, but the price did start gradually creeping up toward the end of the year -- even though it still mostly sat beneath one cent per coin.

The Dog Days End

Amidst January's meme stock fiasco, in which social media-led buying sprees sent the prices for GameStop, AMC, and other stocks soaring, investors began looking for the next stock to buy cheap and try to pump to startling new heights. In just over a week, Dogecoin's price jumped from under a penny to nearly $0.08 per coin, before settling around $0.05 for most of spring.

Things only got wilder after that. Dogecoin popped up to $0.40 per coin in April before pulling back but then leapt again to an all-time high of $0.73 in early May. The wider crypto market has been down since then, in part due to Tesla halting Bitcoin payments for its cars due to the environmental impact of cryptocurrency mining. Even at around half the all-time high price, Dogecoin is still up about 6,000% from the start of the year -- giving it around a $44 billion market cap.

Dogecoin still has its doubters and seems more susceptible to the whims of social media sentiment and influencers than other, less-volatile cryptocurrencies. But it also has more true believers than ever, including Musk—who is working with Dogecoin developers—and billionaire investor Mark Cuban, whose Dallas Mavericks NBA team accepts DOGE for merchandise purchases. It also has copycat coins, like Shiba Inu.

Even so, despite the considerable and rapid rise in price, it's tough to call Dogecoin a serious investment. It's more like a rollercoaster: strap in and enjoy the ride, and pray that you don't feel sick in the end.

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Andrew Hayward owns Dogecoin, Bitcoin, and Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adobe Systems. The Motley Fool Australia has recommended Adobe Systems. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Up nearly 80% this year, does Nvidia stock have room for more?

Nvidia's stock added a lot of its gains the day after Q4 earnings.

Read more »

Piggy bank on an electric charger.
International Stock News

If you'd invested $1,000 in Tesla stock 5 years ago, here's how much you'd have today

Tesla bears may not have noticed it, but Tesla profits are forecast to 3x over the next five years.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
International Stock News

Bull vs. bear: Can the S&P 500 keep rising in 2024?

We review the bull and bear case for the S&P 500 this year.

Read more »

woman with coffee on phone with Tesla
International Stock News

Why Tesla stock put pedal to metal today

Tesla's robotaxi is coming in August.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

If you invested $10,000 in Nvidia stock the day ChatGPT came out, this is how much you'd have today

Buying Nvidia when the disruptive AI chatbot launched would have been a smart move.

Read more »

A Tesla car driving along a road at sunset
International Stock News

Why Tesla stock was climbing today

Investors were encouraged by news of a price hike on the Model Y.

Read more »

Plate with coloured wedges being parcelled out like a slice of pie representing a share split
International Stock News

Stock-split watch: Is Nvidia next?

Nvidia last split its stock when it traded for a pre-split $744 in 2021.

Read more »

A woman in jeans and a casual jumper leans on her car and looks seriously at her mobile phone while her vehicle is charged at an electic vehicle recharging station.
International Stock News

1 Wall Street analyst thinks Tesla stock is going to $125. Is it a sell?

Tesla is no longer a magnificent stock, according to a Wells Fargo analyst.

Read more »