Back in 2013 the first meme coin was minted, aptly named Dogecoin (Doge) as a tribute to the popular meme Doge. Jackson Palmer, a marketer from Adobe systems bought the domain name Dogecoin.com in jest. This eventually evolved and exploded into a digital asset with over $7b in market capitalisation.
The phenomenon surrounding this cryptoasset resulting in the rise of capitalisation, has much to do with the core mechanics of the coin itself. The Dogecoin protocol operates like other blockchain networks such as Litecoin LTC and hasn’t seen many changes recently. Many have attributed the coins success and consequential adoption to its light-hearted marketing strategy and promotion.
In case you are unfamiliar, there is a subreddit named “WallStreetBets” also known as WSB, where users around the world can share experiences in the stock market and often collude to beat the odds and sabotage Wall Street. Many cryptoasset traders and enthusiasts also had an interest in this group due to its mutual forums and similarities.
A recent success of theirs has been regarding GameStop (GME) an American company that primarily deals with physical gaming related products. With the rise of platforms such as PlayStation, Xbox and Steam in conjunction with the COVID-19 pandemic, the market share of its business has declined, seeing many brick and mortar stores close worldwide.
In the stock exchanges, the larger investors (Investment companies and other parties) have been hedging bets for its failure and making profits with its forecasts. They borrowed GME stocks at the beginning of January anticipating its depreciation to make a profit in a process called shorting. However, parties were alarmed when the stocks price had swung, and price skyrocketed.
The WSB group motivations do appear to be beyond profits, as there is a more malicious element of revenge. Many ascribe the 2008 financial crisis to the same larger hedge funds, which resulted in many defaulted mortgages and subsequently left millions homeless.
Many joined the movement with celebrities and through platforms of their own to spread word of the frenzy. During the Gamestop surge, an entity labelled “WSBChairman” speared his hypotheses that Dogecoin had the potential to reach the price of the dollar. The extra attention from the situation in tandem with Elon Musks positive tweets gave Dogecoin a massive boost in its price.
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