Dogecoin price surges as popular trading app adds cryptocurrency for millions of new users
The news helped push dogecoin’s market cap back above $50 billion and it is now trading just a few cents off its all-time high of $0.43.
The decision to make the meme-inspired cryptocurrency available to its users opens up dogecoin investing and trading to eToro’s more than 20 million registered users worldwide.
The trading app had come under criticism from customers for not supporting dogecoin – the world’s sixth most valuable cryptocurrency – despite it experiencing remarkable price gains in 2021.
Other major platforms and exchanges that have been reluctant to add dogecoin include Coinbase. One reason for this could be its volatility, with experts warning that the potential for massive gains comes with the risk of huge losses – even compared to other notoriously volatile cryptocurrencies.
“It is dogecoin’s price relative to bitcoin that makes it so remarkable right now. From 1 January to the market top on 19 April, dogecoin was about 35 times up against bitcoin and 70 time up against the US dollar,” Professor Carol Alexander, a leading crypto academic at the University of Sussex Business School, told The Independent.
“It is a low-cost, high-risk investment with the potential for massive returns – which can’t be found elsewhere at the moment. Even high-risk junk bonds have virtually no returns now.”
A representative of eToro was not immediately available for comment about why it decided to open up to dogecoin. In an email to customers, it stated that it was part of the firm’s “further expansion of crypto services”, which now include 19 cryptocurrencies.
“Beneath the branding, dogecoin is based on solid technical foundations, utilising a proof-of-work mechanism, much like litecoin or bitcoin, with minor yet key differences,” the email stated.
“Unlike bitcoin’s fixed supply and relatively slow block times, the supply of dogecoin increases at a steady rate, making dogecoin inflationary with faster and cheaper transactions – qualities that some say make it ideal for use as a real-world currency.”
Among dogecoin advocates who claim that it could be a viable real-world currency is Elon Musk, who has previously suggested that it could be the “currency of Mars”.
The SpaceX and Tesla CEO offered to buy out so-called dogecoin ‘whales’ earlier this year, claiming that people hoarding large stockpiles of the cryptocurrency are preventing it from becoming a mainstream currency.
“If major dogecoin holders sell most of their coins, it will get my full support,” he tweeted in February.
“Too much concentration is the only real issue imo. I will literally pay actual $ is they just void their accounts.”
His tweets and comments have often had an immediate impact on the price of dogecoin, most recently illustrated when he referred to himself as “the dogefather”.