Dogecoin, the most famous meme coin, has seen its price drop rapidly in recent months. He’s not the only one: the entire crypto industry is in decline right now. But, unlike bitcoin and other cryptocurrencies, it is not certain that Dogecoin will recover from it.
The start of 2022 is not easy in the cryptocurrency market. The main cryptos are currently experiencing sharp declines: bitcoin fell 2.57% in 24 hours on January 7, 2022, Ethereum by 5.56%, and Binance Coin by 4.63%.
This trend can be seen across the cryptocurrency industry. But among them, the Dogecoin is particularly attracting attention. Born out of a joke and popularized by Elon Musk, Dogecoin saw its value explode last year, thanks to tweets from Tesla’s boss. The price of this “meme-coin” is however now in free fall, and nothing says that it will go up one day.
What is Dogecoin?
Dogecoin was not designed to be successful or to make the headlines. Basically, it is the creation of two engineers, who embarked on the project in 2013. This corner It doesn’t really have much use on its own: unlike other blockchain-backed currencies, Dogecoin, whose aesthetic is inspired by the Doge meme, has no obvious purpose or benefit. This was also the original desire of Billy Markus, one of the creators: to make a fun cryptocurrency, as Wikipedia explains. The Doge thus became the first “meme-coin”, an expression which designates the corners inspired by memes.
However, Dogecoin has surged in value in 2021, unexpectedly, thanks to Elon Musk. Because the boss of Tesla, very active and followed on Twitter, is a big fan of crypto, and has let his fans know. On several occasions, he has shared jokes and references to the Doge to his more than 69 million followers – even including at one point in his Twitter bio that he was the former CEO of the cryptocurrency.
Gradually, the Doge’s value increased, largely aided by the publicity Elon Musk gave him for years. The crypto thus went from a value of almost 0 at its launch to 0.70 dollars at its peak in May 2021.
Dogecoin is not the only “meme-coin”: many crypto have launched hoping to ride the success of the Doge. Shiba Inu, Baby Shiba Inu, Husky Coin, Doge Killer or even Floki (named after Elon Musk’s dog) to name a few, have had very relative success.
Why is Dogecoin suddenly going down?
Since that peak, however, Dogecoin has not been having an easy time. And this in part because of… Elon Musk. After sharing private jokes with his community about the meme corner and having been a part of its success for years, the businessman said during a TV show that it was “ a scam “.
This was the first blow to the cryptocurrency, which went by in 45 minutes offrom $ 0.74 to $ 0.48. Since then, its price has experienced a series of ups and downs, but its price has fallen continuously in recent months. And this long descent is now accentuated by the difficulties facing the entire cryptocurrency sector.
This drop is due to the US Federal Reserve, which announced by surprise on January 5 that it intended to raise interest rates. The announcement was not expected for some time yet, as Cryptoast explains, and the entire financial sector was turned upside down. Major U.S. stock indexes fell following announcements from the reserve, and dragged the cryptocurrency sector with them.
If the main cryptocurrencies have managed to minimize their losses, for the same coins, it’s another story: the Dogecoin has fallen by more than 80% since its peak in May 2021, and the Shiba Inu by 65% since the month of ‘October. And above all, unlike cryptosupported by solid financial projects, nothing says that the Doge and the other memes will be able to recover from it.