- Tram Ho
When Elon Musk made the first tweets about Dogecoin, no one would have expected investors to go crazy about pouring into the coin so much. At one point, the cash flow into Dogecoin reached $ 69 billion, surpassing XRP to become the fourth largest cryptocurrency by market capitalization, according to CoinMarketCap.
Right now, Dogecoin is still trading stably around $ 0.2, only and only if the following two factors simultaneously don’t happen: Elon Musk doesn’t tweet and the shark doesn’t pump & discharge.
Indeed, a large reserve of 100 billion original Dogecoin coins currently resides in a limited number of wallets. Meanwhile, Elon Musk, since earlier this year, has repeatedly hinted at Dogecoin, making this virtual currency constantly make new highs.
Dogecoin price increased unprecedentedly on April 19 due to Elon Musk’s tweet on social media.
This does not mean that Dogecoin will become the object for Elon Musk and the shark to manipulate the market forever. With unlimited reserves and circulation of 129 billion VND, Dogecoin is worth $ 0.2 is extremely unusual as the virtual currency has no other benefits than to speculate. No blockchain, no technology, there’s nothing behind it.
Therefore, investors looking for waves to surf with Dogecoin or any other altcoin (grass coin, junk coin) are risking their own savings. If it is margin or futures contracts combined with leverage, it is nothing but a red and black bet that can cause investors to burn their account in a moment.
The flow of money into the crypto market cannot be endless and neither can Dogecoin. When investors realize the meaninglessness of Dogecoin, they will gradually leave it without the control of Elon Musk, Mark Cuban or any other billionaires. Investors simply run out of money in a zero-sum game, with no winners without losers.
This process is slowly happening with Dogecoin, from a peak of $ 70 billion to just $ 34 billion. Trading volume in the past 24 hours was only 7 billion USD compared to the time when a cash flow amounted to 69 billion USD poured in.
This reflects the top swingers shifting from surfing to long-term hold on Dogecoin. But with infinite reserves and every year more than 5 billion new born, the dream of getting rich from Dogecoin is very meaningless.
Then Dogecoin has returned to its true value, possibly even lower.
However, the Dogecoin craze is likely to cool down and return whenever Covid-19 remains unregulated globally. Because at that time the idle cash flow of people tends to pour into the crypto market more, but the word-of-mouth virtual currencies like Dogecoin may become the thing that attracts the most attention.
In a worst-case scenario where Bitcoin bottoms out and causes markets to crash, grassy coins like Dogecoin will inevitably suffer the same fate.
Bitcoin is currently only 21% down from a peak of $ 64,000, but Dogecoin is down nearly 50% from its peak of $ 0.41 on April 19. That shows that the Dogecoin fever is cooling down.
Source : Genk