According to Jason Lau of OKCoin, Dogecoin‘s failure to maintain its all-time high of $0.45 is due to a lack of fundamental support, such as institutional investor interest.
The cryptocurrency industry has grown in popularity over the last year, attracting billionaires and high-profile investors. Elon Musk is one of the most vocal supporters of $DOGE, tweeting many times about it. His clout has undoubtedly aided $ DOGE’s meteoric rise in popularity, propelling it to new heights.
Why Are Institutions Uninterested?
According to Kitco News, despite its origins as a hashtag, Dogecoin is not gaining institutional interest. The entry of institutions into Bitcoin has helped boost the asset’s rally.
To give you an idea of where Dogecoin came from, it was created as a joke in 2013. Adobe employee Jackson Palmer listed the famous meme doge in a tweet: “It’s certainly the next big thing to invest in Dogecoin.” Dogecoin didn’t exist at the time, so he made fun of the growing Bitcoin hype. Billy Markus, an IBM software developer, brought Palmer’s joke to life.
Elon Musk, the CEO of Tesla, is credited with leading the ‘joke’ virtual currency to a stunning increase of around 6000 percent in the last few months. Celebrities such as Snoop Dogg have joined Elon in his attempt to inject $DOGE into the bull market chat.
Lau also clarified why the asset has been trending upward in recent weeks. He claims that the cryptocurrency is entertaining and that people are rallying behind it because the coin is named after a puppy. Despite falling nearly 50% from its all-time peak, the doge remains a profitable asset for some investors compared to BTC and ETH. According to CoinMarketCap, Dogecoin is currently trading at $0.26.
Is it a joke to invest in Dogecoin?
On the internet, people bought the coin as a joke. However, it drew more attention as it started to rally dramatically. Yes, Dogecoin has potential in the short term, but it is a complete gamble.
Dogecoin supporters have compared the cryptocurrency to Bitcoin, which former hedge fund manager Mike Novogratz has cautioned against. He noted that comparing doge to bitcoin or other cryptocurrencies is incorrect. In comparison to Dogecoin, the annual Capex and OPEX spent on maintaining the Bitcoin network decentralized and operational is enormous, according to Novogratz.
Galaxy’s Digital CEO, Michael Novogratz, has warned against investing in Dogecoin one of the leading cryptocurrency leaders. He dubbed the rally a “retail phenomenon” since the federal reserve’s injection of more money into the economy coincided with the growth of the doge.