REUTERS/Dado Ruvic/Illustration//File Photo
- Dogecoin may have started as a joke in 2013 but the cryptocurrency has seen very real gains in 2021.
- Coinbase in May responded to customer demands, and said retail users can sell, buy, and store dogecoin, joining the ranks of other major exchanges.
- Insider asked eight experts what they think of dogecoin's listing on the largest US crypto exchange.
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Dogecoin may have started as a joke in 2013, but few are laughing at its hefty gains after the famous meme token catapulted to a market valuation of around $90 billion at one point in April.
More recently, Coinbase, the largest cryptocurrency exchange in the US, said retail traders can sell, buy, and store dogecoin. The company, with its 56 million verified users, paired the announcement with plans to give away $1.2 million worth of prizes in dogecoin to encourage users to take advantage of its newest cryptocurrency trading option.
The move came two days after Coinbase said Coinbase Pro users can transfer dogecoin into their accounts. Dogecoin surged 41% on the news.
A tweet from Elon Musk hours after further spurred the token's rally.
-Elon Musk (@elonmusk) June 2, 2021
Dogecoin has rocketed nearly 8,000% this year, far surpassing bitcoin's nearly 30% gain and ether's 260% climb.
The shiba inu-themed token goes through wild price swings but some analysts do not seem too bothered.
"The price action in doge is extremely volatile but is ultimately driven by supply and demand with real capital," Jeffrey Wang, head of Americas of Amber Group, a crypto financial services firm, told Insider. "I think the price moves in doge are a great example of free capital markets in action."
Coinbase joins Gemini and eToro, which both listed the meme token in May this year, as well as Kraken and Binance. Combined, the exchanges effectively open up the meme token to tens of millions of users worldwide.
While the listing is viewed as a stamp of approval by some, others like Peter Jensen, CEO at RocketFuel Blockchain, a global payments company, view the decision of Coinbase as just a strategic business move.
"Exchanges like Coinbase Pro and eToro have enlisted doge only because of the massive inflow of retail user base that dogecoin is getting, which in turn means it's a profit-generating coin for exchanges," Jensen told Insider.
Jensen added that unless a major technological upgrade is given to dogecoin, it will remain to be a highly speculative asset without any technological merits.
Here are what eight other experts think of dogecoin's recent listing:
Wait, but why?
"Dogecoin's popularity is really just a by-product of the meme-populist age. In essence, it's a fun way for people to transact and get involved in crypto and investing. Doge is unlikely to have any "use-case" even in the loose sense of the term. It's important to realize that even the creator Billy Markus sold off all of his dogecoin holdings. Doge can't compete with bitcoin in the long run because bitcoin has limited supply, and is emerging as a sort of "digital gold." It can't square off against ethereum either due to ETH's smart contract and decentralized app functionality. On its own, it has nothing to offer. So I don't see this as a watershed moment for dogecoin legitimacy." - Muneeb Jan, author, Macro Geek Newsletter
"Coinbase is just responding to this popularity. I don't view dogecoin as being legitimized. Coinbase is an exchange, there are no institutions buying it seriously. Since its supply is unlimited, there are 10,000 new coins mined every minute. This makes it highly inefficient as a legitimate crypto coin except to those that use its volatility to trade it and hang on Elon Musk's tweets to pump up its value. Even today, Musk's tweets and mentions of dogecoin seem satirical, not serious. I'm not a fan of hype around dogecoin because it's a distraction from the useful things being done in blockchain and in crypto, like DeFi." - Andrew Kiguel, cofounder and CEO, Tokens.com
"We still view this as speculative at best. I think the biggest implication is that many small investors will lose money. The broad crypto landscape, in my opinion, is a combination between a pyramid scheme and the wild west. There are people that will make a lot of money, but there are also a lot of folks who will lose. There are some more legitimate currencies; however, there are also hundreds that are nothing more than ideas. Those that are looking at longer term placeholders for wealth will buy more established cryptos like ether or bitcoin and simply hold." - Randy Carver, financial expert
"As more crypto brokers begin to offer dogecoin, I see its popularity increasing, but it will take time before it is fully accepted. While socially active, lower account size retail investors are interested in dogecoin and crypto's in general, active retail investors who trade equities and equity options have largely stayed on the side of crypto trading. With only 50,000 permissible daily transactions of dogecoin, it is a generation away from wider acceptance with retail and institutional investors." - Dan Raju, CEO, Tradier
It's about time.
"While a little late, the Coinbase listing is yet another positive sign for the doge community. While it began as a joke, doge's track record has earned it a place amongst 'legitimate' digital assets. While the technology itself hasn't evolved much, doge has an incredible community and the power of that should not be underestimated. It may have taken Elon Musk and other influential figures to drive awareness and convince institutions of dogecoin's legitimacy, but as a peer-to-peer network, it's been widely used for nearly a decade." - Jason Lau, COO, Okcoin
"The meme currency is now firmly in the mainstream. It's likely that we'll see even more interest and adoption from retail investors in the short term, as well as some current doge holders cashing out. Long-term, we simply don't know; interest in doge may wane, or growing popularity may force traditional financial institutions to re-think what counts as a legitimate asset class. As global adoption continues, the cryptocurrency trading landscape is set to evolve with it. Dogecoin is a representation of how everyday internet users can shape markets when they have the opportunity." - Philip Gradwell, chief economist, Chainalysis
"Dogecoin getting listed by Coinbase, Gemini, and eToro shows that cryptocurrencies with very strong communities and positive sentiment cannot be ignored, even if they are meme coins. At the end of the day exchanges make money from trades and listing popular cryptocurrencies is good for business as long they are not securities. Liquidity and wide exposure should help dogecoin reach an even larger audience. Originally a meme coin, dogecoin is now a more legitimate digital currency in the eyes of new crypto users than the rest of the field." - Ian Balina, founder and CEO, Token Metrics
"With the listing of dogecoin on Coinbase, one of the most reputable exchanges, it creates a lot of momentum as well as liquidity. This drives the price up and creates a positive feedback loop on the momentum. I think Coinbase made a significant choice as it ultimately signals that even if coins are created initially as a joke, with enough momentum and a strong community, it can become something much greater. It's no surprise that doge started as a joke, but with the recent momentum and price action, I think it has created a positive feedback loop of luring back in developers and entrepreneurs and institutions." - Ben Weiss, CEO, CoinFlip