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Dogecoin Rips in Meme-Fueled Frenzy on Pot-Smoking Holiday

Published 04/20/2021, 08:21 AM
Updated 04/20/2021, 08:36 AM
Dogecoin Rips in Meme-Fueled Frenzy on Pot-Smoking Holiday
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(Bloomberg) -- Fans are driving Dogecoin higher to mark a day known for celebrating pot smoking.

The Shiba Inu-themed token traded to nearly 42 cents on Tuesday, further stoking the social media frenzy that’s being propelled by the #DogeDay hashtag trending on Twitter on April 20, or 4/20 -- pot-user slang for smoking cannabis.

In the past week, Dogecoin has jumped more than 400% and now has a market value of more than $51 billion, according to data from crypto data provider CoinGecko.com.

The meteoric gains have come even as other crypto assets start to break down. Bitcoin has fallen for five straight days, and was trading below $56,000 as of 8:15 a.m. in New York on Tuesday. Ether, the second-largest cryptocurrency, fell 1.6% to $2,174.

“There’s a tribe of investors, many of them millennials, who see it as a cause, a movement,” said Antoni Trenchev, the co-founder of crypto-lending firm Nexo. “Dogecoin is symptomatic of the Zeitgeist happening before our very eyes.”

In the wider crypto space, the latest volatility has fueled talk about a bubble. Crypto’s champions are part of a iconoclastic trend, including the WallStreetBets retail traders, that’s challenging investment norms.

The likes of Bitcoin and Ether are still up about 90% and 180%, respectively, this year as the crypto industry matures. Institutional investors such as Goldman Sachs Group Inc (NYSE:GS). and Bank of New York Mellon (NYSE:BK) have stepped into the sector, and the Nasdaq listing of Coinbase Global Inc (NASDAQ:COIN) last week has lifted crypto’s profile in mainstream markets.

“Bitcoin is trying to stabilize following the weekend plunge to bear-market territory,” said Edward Moya, senior market analyst at Oanda Corp. “Institutional demand might find this massive sell-off as a buying opportunity. Bitcoin could continue to stabilize here, with a new trading range forming between $52,000 and $62,000 for the next few weeks.”

While fans of Dogecoin keep making waves, some crypto investors offered words of caution.

“It really must be alt-coin season,” said Justin Chuh, senior trader at regulated digital asset investment manager Wave Financial, who expects most retail investors are best off buying and holding a portfolio of just Bitcoin and Ether, and the internet pile-on in the asset class only “adds to the gut-wrenching volatility.”

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