Just like the first cryptocurrency is Bitcoin, the first meme coin is Dogecoin which was created in 2013. While Dogecoin came into being as a joke, it has since been a sensation in the cryptocurrency world. However, like every other cryptocurrency, Dogecoin is volatile. Irrespective of this, many investors still flock to the coin. To further help investors who might seek to invest in the coin, below are some of the factors that affect the price of the Dogecoin cryptocurrency.
Influence of Online Communities and Social Media
A significant factor that affects the price of Dogecoin is the coin’s discussion on online forums like Reddit and social media. Dogecoin is promoted on social media by an active community of supporters. With this, the coin gains an increased hype that usually leads to price spikes as more people invest in it.
For instance, in 2021, Dogecoin witnessed a sharp price increase after Elon Musk made a tweet concerning the cryptocurrency on various instances. Elon Musk as the ‘Doge father’ continuously shows support for the cryptocurrency which has resulted in Dogecoin price spikes. So, this social media momentum remains a vital force in Dogecoin’s volatility.
Prominent Trends in the Cryptocurrency Market
Dogecoin doesn’t just exist alone, it is a part of the broader cryptocurrency market. As a result, it is also subject to market trends. Trading or investing in the Dogecoin cryptocurrency makes it subject to market trends. When the whole cryptocurrency market booms, investors’ appetite coils resulting in a price increase. However, market downturns like the 2022 crypto winter can also put the con under pressure.
While Dogecoin is unique, it still adheres to the trends in the broader cryptocurrency market. This can be seen in the speculations like the meme frenzy of 2021 which impacted the coin.
Demand and Supply
Dogecoin is also subject to the rules of economics, so when there is a high order and low supply, the cryptocurrency price increases. On the other hand, when there is increased supply and low demand, Dogecoin’s price would reduce. Demand and supply are important in determining the price of the coin and this is also subject to the people.
The Rise of Meme Coins
With the success of Dogecoin, there was a market proliferation of new meme coins. This occurred not only in the cryptocurrency sector but also in the stock market. Meme coins became a new movement and investment like the more recent Wall Street Baby. Dogecoin and other meme cryptocurrencies’ incredible success is largely linked to not only the influence of social media and celebrities but also targeted and fruitful marketing campaigns.
Endnote
As the cryptocurrency market keeps growing, gradually, meme coins like Dogecoin will remain appealing to big and small investors. This would be largely attributed to its social media popularity and status and celebrities’ input. Several factors affect the price of Dogecoin. However, cryptocurrency’s nature and market are dynamic and there isn’t an actual regulatory body. When you intend to invest in cryptocurrency, you must perform your research before diving in.
