Dogecoin, a meme-based cryptocurrency, dropped on Tuesday after reaching an all-time high in a crazy session that saw proponents of the token, which was once dismissed as a joke, use hashtags to fuel a rally before it fizzled out.
Dogecoin eventually dropped 15.4 percent to US$0.33, but its market capitalization soared to more than $50 billion during the session as it reached a new high. According to coinmarketcap.com, the market cap fell by around $45 billion as a result of the downturn.
Bitcoin, on the other hand, has a market capitalization of over $1 trillion.
On Twitter, Reddit, and TikTok, Dogecoin fans used the hashtags #DogeDay and #DogeDay420 to share memes, tweets, and videos about the April 20th holiday, which is marked by smoke-ins and street parties.
Dogecoin, which was released as a satirical satire of 2013's cryptocurrency frenzy, has surpassed more widely-used cryptocurrencies like Litecoin and briefly Tether to become the sixth-largest coin this year, thanks to an 8,000 percent price rise.
"The current retail fervour probably won't totally abandon Dogecoin," said Edward Moya, senior market analyst at online FX trading platform OANDA, but he predicted the cryptocurrency's "sell the event reaction."
The Shiba Inu dog is featured prominently in Dogecoin's logo. It can be bought and sold on cryptocurrency exchanges as well as more conventional trading apps.
"The Doge rally reflects a fascinating convergence," said Diana Biggs, CEO of crypto start-up Valour, after Dogecoin's price soared to a record $0.42 in the last week, according to CoinMarketCap.
TRADING ONLINE-
The emergence of Dogecoin coincided with a boom in online stock and cryptocurrency trading by retail investors who were trapped at home with extra cash due to the COVID-19 pandemic. The coin's use for payments and trade has not grown significantly.
This year's social-media-driven rally in GameStop Corp stock pitted retail investors against hedge funds, thanks to a surge in the use of online trading apps like Robinhood.
"It's a continuation of the same phenomenon that led to Tesla stock being priced far beyond fundamentals and, more recently, the GME (GameStop) short squeeze," said Ajit Tripathi, head of institutional business at decentralised finance startup Aave.
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