Dogecoin price: Why is dogecoin going up? Analyst warns DOGE ‘bubble has to burst’

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Dogecoin is exchanging hands for £0.088072 ($0.121396) per token, according to the latest Coindesk data at 10.32am BST. The cryptocurrency, which began life as a joke but has been adopted by a loyal fanbase of users, has been exceeding all expectations. DOGE prices have been on the rise since Tuesday, with the token pulling in 60 to 80 percent returns in the last few hours.

Earlier today, the token peaked at an all-time high price of £0.105420 ($0.145308) – a good indicator of a surge in crypto interest.

Dogecoin has been experiencing something of a heyday since it was taken under the wings of tech mogul Elon Musk.

The South African billionaire has been frequently tweeting about the token, sharing memes and has even vowed to put dogecoin on the Moon.

The cryptocurrency is, consequently, now valued at a staggering £11.5billion ($15.85billion).

According to Michael Kamerman, CEO of the Scandinavian-owned fintech Skilling, dogecoin stands out from many other tokens, thanks to the way it is set up.

Unlike bitcoin, which has a finite supply hardwired into its code, DOGE tokens are inflationary, meaning the supply will never run dry.

This has led to increased popularity as it incentivises crypto miners to mine for more DOGE.

However, the expert noted, it is the mainstream attention from “high-profile business magnates” like Mr Musk that has mainly driven interest and prices up.

Mr Kamerman told Express.co.uk: “Whilst I cannot predict the market direction, I can hypothesize that the variables underpinning such run-ups in price will remain unchanged for the short-term.

“Right now, investors and traders are almost encouraged to take risk.

“Interest rates are near zero and mainstream news continues to proffer stories about how the wealthy have become even wealthier on the back of rising stock prices – during a global pandemic.

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“The FOMO factor is at fever pitch and everywhere you turn market exuberance still exists.”

DOGE owners have been holding out on the cryptocurrency mooning or skyrocketing to exorbitant prices.

Early adopters who mined or bought the token when it was worth proverbial peanuts can already cash out with large profit margins.

For comparison, one year ago, DOGE was trading for a measly $0.0019 token.

Some market analysts, however, fear the DOGE frenzy is not going to last.

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David Kimberley, an analyst at Freetrade, is worried people are buying into DOGE not because they believe in the token, but because they have jumped the bandwagon.

When the token was created by software engineers Billy Markus and Jackson Palmerin in 2013, after all, it was meant as an online joke.

Mr Kimberley warned: “People are buying the cryptocurrency, not because they think it has any meaningful value, but because they hope others will pile in, push the price up and then they can sell off and make a quick buck.

“But when everyone is doing this, the bubble eventually has to burst and you’re going to be left short-changed if you don’t get out in time.

“And it’s almost impossible to say when that’s going to happen.

“This is doubly the case in the crypto markets where a small group of players often hold a huge chunk of the total number of ‘coins’ in circulation.

“That means it only takes one person to dump all their holdings for the entire market to tank.”

Here in the UK, the official advice from The Financial Conduct Authority (FCA) is that cryptocurrencies are an all-high risk, speculative investment.

The FCA said earlier this year: “If you invest in cryptoassets, you should be prepared to lose all your money.”

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