The cryptocurrency dogecoin, which was born as a joke in 2013 and has been powered by billionaires Elon Musk and Mark Cuban, soared 180% on Friday, according to CoinMarketCap.com, reaching a market value of more than $ 48 billion. (40,060 million euros). Now it is worth 18,000% more than a year ago, when it was trading at $ 0.002 and its value was about $ 250 million.
This wild rally has stoked fears of a potential bubble in the cryptocurrency universe, which is already over $ 2.25 trillion. “This reminds me of the days of the dot com. We knew that something big was happening, many investors were chasing after it. That led to a bubble, ”said Scott Knapp, chief market strategist at CUNA Mutual Group. “For every Amazon.com, there were 10 pets.com [negocio online de venta de artículos para mascotas que fue el paradigma de la burbuja puntocom y que quebró en el año 2000]. Is dogecoin the pets.com of the cryptocurrency era? ”He wonders.
Interest in cryptocurrencies is on the rise after some companies, from PayPal to Square, started allowing bitcoin transactions. And that Morgan Stanley is going to become the first great Wall Street bank that will allow its richest clients to access investment funds in bitcoin. During all this time, cryptocurrency fans who say that the technology blockchain revolutionize the financial community have been working with them, enriching themselves in the process.
The dogecoin, created by software engineers Billy Markus and Jackson Palmer, is based on the meme Doge, which became popular in late 2013 and depicts a Shiba Inu dog. With the sole claim of being a fun alternative to bitcoin, the cryptocurrency has not stopped gaining followers. Earlier this year, Elon Musk caused the coin to skyrocket after a tweet.
But Michael Novogratz, CEO of Galaxy Digital Holdings, doesn’t buy into this hype and says dogecoin “doesn’t really have a purpose.” “It’s reminiscent of GameStop,” he said in an interview with Bloomberg TV, referring to the fury fueled by retailers since Reddit in February. “I would be very, very concerned if one of my friends was investing in dogecoin at these prices.” With few arguments to support buying cryptocurrencies, the likelihood of them crashing remains high, leaving novice traders exposed to heavy losses, according to some analysts.
“The government is injecting a lot of monetary and fiscal stimulus into the economy, even worthless assets are being offered,” said Michael O’Rourke, chief market strategist at JonesTrading. However, the popularity of altcoins is hard to ignore. Bitcoin exceeds $ 1 trillion in capitalization and the total market valuation of the cryptocurrency universe already exceeds 2.25 trillion, according to CoinGecko.com, which tracks more than 6,700 coins.
Bitcoin’s dominance in the crypto world has declined 28% since the beginning of the year, according to Robbie Liu, an analyst at OKEX Insights, citing data from Tradingview. The pullback started accelerating this month, he said in an email on Friday, and bitcoin now accounts for less than 54% of market capitalization, the lowest level in nearly two years.
Still, “we continue to see strong momentum,” Pankaj Balani, CEO of Delta Exchange, one of the leading cryptocurrency derivatives platforms, said in a note. Balani pointed to the recent record for ether cryptocurrency and increased activity in decentralized finance, adding that in the coming days “decentralized exchange currencies will be in focus as the market has validated Coinbase with a $ 100 billion valuation.” .
Cardano and polkadot, both in the top 10 cryptocurrencies by market capitalization, advanced this week and, according to Altcoinbuzz.io founder Shashwat Gupta, have great potential for development. Coinbase’s IPO on April 14 “should keep the cryptocurrency market growing,” said Edward Moya, market analyst. senior for North America at Oanda Corp.
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