What is Dogecoin and why is the price going down?

DOGECOIN recently hit its all-time high prince as interest in the “joke” cryptocurrency grew.

But the crypto coin took a significant drop on May 9, hitting just $0.43, but what is Dogecoin and why is the cryptocurrency going up?

? Read our cryptocurrency live blog for the latest Bitcoin updates

We explain what you need to know about Dogecoin and its recent surge in valueCredit: Alamy

But first, a word of warning: you can lose all the money you put in to Dogecoin and other cryptocurrencies, as well as investments related to them.

Buying cryptocurrencies, like any investment, is a very risky business and making money is never guaranteed.

You should make sure you know the risks of investing in cryptocurrencies and that you can afford to lose any money you put in.

Cryptocurrencies are highly volatile, so the value of your investments can go down as well as up in the blink of an eye.

What is Dogecoin?

Dogecoin is a cryptocurrency and was first launched back in 2013.

Dogecoin has the image of a Shiba Inu dog as its logo.

The image became a popular internet meme called doge, and it features the dog surrounded by text in the comic sans font with words like “much wow”.

Software engineers Jackson Palmer and Billy Markus originally created Dogecoin as a joke based on this meme.

It has been marketed as the “fun” version of bitcoin but has gained in value and attracted more serious interest since then.

Two weeks after it first launched, the value of it jumped 300% after China banned banks from investing in cryptocurrencies, according to Investopedia.

Dogecoin then skyrocketed alongside other cryptos during the bubble that peaked in 2017, and it fell with the rest of them over 2018.

On May 4 this year, Dogecoin reached its highest value yet of $0.4854, according to crypto data firm CoinMarketCap.

Today, it has hit $0.65, according to Coindesk.

Why is the Dogecoin price going down?

Dogecoin has received backing from celebrities including Elon Musk and Snoop Dog, pushing up the price.

How the Dogecoin price has changed over 24 hours from May 8

But it was Musk’s appearance on Saturday Night Live in the US that saw the the price of Dogecoin plummet.

The Tesla CEO welcomed his mother, Maye, onto the show to wish her a Happy Mother’s Day – which is celebrated on May 9 in USA.

She said on SNL: “I am excited for my Mother’s Day gift. I just hope that it’s not Dogecoin.”

Elon replied: “It is. It sure is.”

Dogecoin’s price was over $0.70 on Saturday, but shortly after Musk’s mention, the price fell, hitting $0.47 as of 1pm on May 9.

Dogecoin enjoyed a surge recently after it was announced that a well-known cryptocurrency platform would accept the coin.

Customers who use eToro – and there are around 20 million of them globally – will now be able to buy and sell Dogecoin.

The online trading platform left users users locked out of their accounts earlier this year after crypto markets crashed.

Users were unable to sell their holdings in bitcoin and ethereum because of technical difficulties.

How has Dogecoin’s price changed?

Dogecoin has experienced a surge in trading this year that has seen its value soar, according to crypto data firm CoinMarketCap.

Entrepreneur and Tesla chief executive Elon Musk has often tweeted about the cryptocurrency which has stoked interest and sent the price up.

Other famous people including Snoop Dogg and investor Mark Cuban have also tweeted their support of Dogecoin.

Dogecoin initially surged in January, jumping by a staggering 972% from $0.007 (less than 1p) the day before.

That was off the back of a bunch of Reddit threads calling for it to hit a value of $1 per coin.

The target was an attempt to mirror a share surge in heavily shorted companies like GameStop.

Shares in GameStop soared by a staggering 700% earlier in January after an army of amateur traders targeted the games retailer, causing professional hedge funds who’d shorted it to lose billions.

But for the amateur traders, the surge saw them make some serious cash.

In simple terms, “short selling” is when professional investors borrow shares of stock to sell, and then buy them back at a lower price.

5 risks of crypto investments

THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.

Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
Marketing materials: Firms may overstate the returns of products or understate the risks involved.

Following GameStop’s share surge, Reddit users on other threads referenced WallStreetBet’s effort to squeeze out Wall Street hedge funds and urged people to buy into Dogecoin too.

One thread, titled “Dogecoin is the next GME/Bitcoin” (GME is GameStop), said getting Dogecoin to $1 a coin would be “an incredible achievement”.

It added it would “completely change the crypto market… Dogecoin to the moon.”

Dogecoin also received a boost after it was tweeted by an account called “WSB Chairman”, which insists it isn’t associated with the Reddit group.

The price of Dogecoin has surged again in April but is volatile and fell back from its previous record highs.