Why Is Dogecoin Pumping So Wildly?
The currency initially began as a joke – a rival of bitcoin that was never designed to be taken seriously. After all, the asset’s mascot is a cute little Shiba Inu, not the hardcore dollar sign-shaped B that has become so synonymous with bitcoin.
However, something strange has been happening with the currency, which was declared to have a $1 billion market cap in 2018. The asset’s price has doubled over the past few days from $0.0023 to $0.0046, and it appears to have all begun with a simple TikTok video.
TikTok is a video-sharing and streaming app that has been at the center of widespread controversy. Secretary of State Mike Pompeo explained in an interview recently that the United States government is now looking into a nationwide ban of the app, as utilizing the platform could potentially expose one’s private information to Chinese regulators. The app has already been banned in India and Hong Kong for the same reason.
TikTok user James Galante has put out a series of videos discussing the currency and telling all his followers to “get rich.” Despite the relatively low number of followers on his account (roughly $5,700 at the time of writing), the most recent video put out by Galante has been viewed just under one million times. The previous video was viewed roughly 250,000 times.
Talking with his followers, Galante mentioned:
Dogecoin is practically worthless. There are 800 million TikTok users. Once it hits $1, you’ll have $10,000. Tell everyone you know.
Not Everyone Is Convinced
Despite all the positive hype and powerful price maneuvers that Dogecoin has been undergoing at press time, not everyone is convinced that something good will come of the situation. Veteran trader and author of “The Crypto Trader” Glen Goodman recently warned:
This is the most transparent pump-and-dump scam I’ve ever seen, though I’m not sure we can even call it a scam as everybody who gets involved knows it’s a scam beforehand. The TikTok videos urging people to bid up the doge price remind me of some of the world’s most blatant pyramid schemes, where the sales pitch typically goes, ‘Look, we all know this is a pyramid scheme that will collapse eventually, but you will be one of the winners who rakes in the cash, while only the later entrants will lose money… With no fundamentals to support it, the price of Dogecoin will only go up so long as the early buyers who are cashing out have new buyers to sell to. Once the supply of willing suckers starts running dry, the price collapses.
Not long ago, Tesla and SpaceX CEO Elon Musk declared Dogecoin to be the best cryptocurrency.