How has Dogecoin performed in 2021 so far?

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Dogecoin calls itself the ‘fun and friendly internet currency’, and its popularity has soared in recent times. So how has it performed in 2021? Let’s take a look.

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What is Dogecoin?

Founded in 2013, initially as a joke, Dogecoin is a type of cryptocurrency.

There are around 130 billion Dodgecoins in existence. Unlike other cryptocurrencies, such as Bitcoin, the number of Dodgecoins isn’t capped. In fact, around 10,000 of them are created each day.

For the full lowdown, see our article on the ins and outs of Dogecoin.

How has Dogecoin performed this year?

Following its launch, one Dogecoin was worth $0.0002 – that’s two ten-thousandths of a cent.

Its value remained around that price for a number of years until April 2017, when it lept to $0.0005. Jan 2018 saw its value increase further to $0.017 and by late December 2020, the cryptocurrency was worth $0.009. 

Dogecoin’s value hit $0.01 in early January 2021, before trebling to $0.037 by the end of the month. February saw Dogecoin rise further, to $0.072.

Following successive gains, March saw its value fall slightly to $0.053, though April posed an entirely different story.

At the beginning of April 2021, one coin was worth $0.061. By the 19th, its value had rocketed to $0.407. Dogecoin ended April worth a slightly lower $0.337 – one-third of a dollar.

May 2021 saw its value reach an all-time high of $0.685, leading to some speculators suggesting the cryptocurrency’s value could reach one dollar. However, those who bought Dogecoin during this time were likely left disappointed. By the end of the month, its price had plummeted by more than half, to $0.325.

Since the beginning of summer 2021, Dogecoin’s price has failed to impress. The end of June 2021 saw Dogecoin hit $0.25, while July saw the cryptocurrency’s value fall further, to $0.208.  

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Why is Dogecoin so volatile?

Having been initially valued at $0.0002, and then increasing to more than half a dollar by mid-2021, Dogecoin has seen some hefty surges in its value. Yet its history has also shown that it is also susceptible to huge falls.

While it’s almost impossible to predict future values of cryptocurrency, there are a few factors likely to have influenced the price of Dogecoin in 2021. Let’s take a look at the top three.

1. Elon Musk

The unconventional entrepreneur has made numerous comments about Dogecoin’s performance in 2021, often via Twitter. 

Musk also declared that Dogecoin could go ‘to the moon’ during an appearance on US TV comedy show, Saturday Night Live in May 2021 – the same month that Dogecoin’s price witnessed massive volatility.

2. The ‘Bitcoin effect’

The value of Bitcoin has increased in 2021, no doubt increasing interest in cryptocurrencies.

With one Bitcoin being worth in the region of $40,000, Dogecoin’s cheap price may also have attracted many to buy the cryptocurrency, instead of Bitcoin.

3. Fear of missing out (FOMO)

With huge cryptocurrencies making huge gains over the past year or so, it’s fair to say that FOMO may have played a part in people stocking up on Dogecoin during 2021. It’s worth knowing, however, that some analysts see cryptocurrency buying as a prime example of the greater fool theory.

To learn more about cryptocurrencies, see our article: Why is cryptocurrency important?

Investing in cryptocurrency is extremely high risk and complex. The Motley Fool has provided this article for the sole purpose of education and not to help you decide whether or not to invest in cryptocurrency. Should you decide to invest in cryptocurrency or in any other investment, you should always obtain appropriate financial advice and only invest what you can afford to lose.

The post How has Dogecoin performed in 2021 so far? appeared first on The Motley Fool UK.

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