Dogecoin, Once a Joke, Moves Mainstream

A cryptocurrency that was created as a joke exploded into plain view on Wall Street on Monday, with a surge in dogecoin sending its 2021 return above 8,100%—more than double the gains on the S&P 500, including dividends, since 1988. Dogecoin’s rise from a quirky meme into a widely traded asset worth about $50 billion—more than Marriott International Inc. or Ford Motor Co. —is the latest act of financial alchemy by rapidly moving individual investors who have used access to no-fee trading platforms and a wave of government stimulus money to transform markets over the past year.

The cryptocurrency’s rise is reminiscent of GameStop Corp.’s stunning advance earlier this year, an episode in which traders congregating on Reddit and other social-media platforms made a past-prime mall retailer into a stock-market superpower. This time, dogecoin’s buyers have gone a step further, turning what was meant as a parody into a real asset, providing some traders who piled in early with unimaginable gains. The latest stage of the frenzy centers on Tuesday having been deemed “Doge Day” in online forums, a loosely organized bid to push the price of the cryptocurrency to $1, from a 5 p.m. ET closing price of nearly 39 cents on Monday and less than a penny in January.

Both episodes underscore the scale and potency of the current retail-trading environment, in which organized efforts in online communities can make a surprisingly large impact on market prices. They also reflect expectations that prices will continue rising, and as such they embody risks that these sudden fortunes will be wiped out when the winds of the markets shift.

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For now, the rise and fall of favored assets in online forums has largely been contained. GameStop’s surge peaked in January and fizzled without hitting major indexes. That said, many investors are keeping an eye on these market oddities, reasoning that a precipitous fall in the price of dogecoin or bitcoin could prompt hedge funds and other large investors to reduce risky holdings and contribute to a broader retreat from risk.

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For now, dogecoin’s sharp rise is vindicating one of the strange but true facts of 2021: The most unconventional trades can sometimes yield outsize gains. Someone who invested $10,000 in dogecoin on Dec. 31 would have amassed more than $821,000 as of Monday, according to data from Kraken. The same money invested in shares of GameStop would have yielded just under $87,250, and in an index fund tracking the S&P 500 nearly $11,150, including dividends. Should dogecoin go on to hit $1, its value would exceed blue-chip companies including Advanced Micro Devices Inc., CVS Health Corp. and General Motors Co. Dogecoin serves no purpose, and unlike bitcoin, faces no limit on the number of coins that can exist. Each day, computers solve mathematical puzzles to unlock new coins. About 129.2 billion dogecoin were in circulation Monday, according to CoinDesk.

More..

https://www.wsj.com/articles/dogecoin-traders-whip-up-doge-day-frenzy-in-push-toward-1-11618842535 (subscription)

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I have no idea what all this means, but perhaps other may find it of interest..

Also,

By Tuesday, it fell to 31 cents, according to CoinDesk, despite some online users’ efforts to push it to $1 to recognize what some have called “Doge Day.”