U.Today - Two years ago, Barron's an article with the headline, "With a $78 Billion Market Cap, Dogecoin Needs to Be Taken a Little More Seriously."
At the time, the whimsical meme cryptocurrency was riding the tidal wave of hype, fueled by a passionate online community and support from prominent figures like Tesla (NASDAQ:TSLA) CEO Elon Musk. But as we look back, it becomes clear that the headline, much like the house of cards built on the hype surrounding the meme-based digital currency, hasn't aged gracefully.
Reflecting on the headline, Nate Geraci, president of ETF Store, , "Might be my favorite headline of all time."
In early 2021, Dogecoin's value skyrocketed, starting the year at less than a penny and soaring above 69 cents by May. The digital currency attracted attention from retail investors, with trading platforms like Robinhood (NASDAQ:HOOD) struggling to handle the volume.
The social aspect of the cryptocurrency, which was launched as a joke in 2013, acted as a gust of wind propelling its rapid growth.
Online communities rallied around events such as "Doge Day" on April 20th, and many attributed the coin's gains to Musk's scheduled appearance on Saturday Night Live.
Despite its lack of a supply cap and limited mainstream appeal, Dogecoin's enthusiastic community helped drive its market cap to a staggering $78 billion. However, many critics rightfully viewed the coin as an example of market excess.
Fast forward to today, and Dogecoin has plummeted 89% from its record high, a stark reminder of the volatile nature of the cryptocurrency market.
Even though the online community behind Dogecoin remains active, the coin's dramatic fall from grace serves as a cautionary tale about the risks of chasing speculative investments based on hype alone.