Since the start of the year, the price of Bitcoin has surged 89% to over $54,000 which is seven times greater than the return of the S&P 500 during the same period but other major cryptocurrencies have posted even larger returns despite Bitcoin staggering gains.
The second biggest Crypto Ethereum, is up 343% this year to just under $3,300 and is expected to reach $5,000 by the end of the month according to Crypto proponents and major stakeholders in the space. However the impressive gains on both Bitcoin and Ethereum is dwarfed by another cryptocurrency called Dogecoin which was started as a joke.
The price of the meme coin has been going parabolic, posting an astronomical increase of 14,000% this year and is currently priced around $0.61.
For perspective, a $1,000 investment in Dogecoin at the start of 2021 would now be worth over $140,000.
That parabolic rise is drawing both applause and apprehension as its supporters which includes Dallas Mavericks billionaire owner Mark Cuban again world richest man Elon Musk aim to drive the parody coin to a value near $1, with critics warning that the asset bears all the hallmarks of an asset bubble that is bound to pop and leave carnage in its wake.
Major cryptocurrencies have all enjoyed meteoric rise since the start of the year but gains of Dogecoin in particular are off the charts. This is as a result of the meme coin having less market capitalization compared to major cryptocurrencies meaning an influx of new money will create a higher percentage gain than if the same amount went into Bitcoin or Ethereum.
Dogecoin market capitalization is $78 billion as of Thursday, 6th of May. That compares to the market caps of $375 billion and $1 trillion, respectively, for Ethereum and Bitcoin. A price surge to $1 which is about 66% from current price will have Dogecoin market capitalization at $129 billion.
However, analysts warn that it could quickly unravel because the digital currency has no intrinsic value; relying on investment hype, speculation, and fear of missing out.