What’s powering Dogecoin’s astronomical April rally?

Summary

• With Dogecoin price hitting an all-time high, fans celebrated 20 April as 'Doge Day'.
• The meme-based cryptocurrency recorded a new high of US$0.42 per unit on Tuesday.
• The market cap of Dogecoin crossed US$50 billion, higher than that of Ford Motor Co. and Kraft Heinz Co.

Dogecoin, a cryptocurrency which started as a joke, has now become bigger than some serious companies in terms of market valuation. The market capitalisation of dog-mascot crypto coin crossed US$50 billion on Tuesday, higher than that of Ford Motor Co. and Kraft Heinz Co. and nearly equal to microblogging site Twitter Inc.

The price of the meme-based cryptocurrency hit an all-time high of US$0.42 per unit on Tuesday as its fans celebrated 20 April as 'Doge Day'. The DOGE fans used the hashtags #DogeDay and #DogeDay420 to post memes, messages, and videos on social media to celebrate 20 April holiday, a day marked in cannabis culture for smoking marijuana.

Paring some of the early gains, the crypto coin fell 15% to close at US$0.32 on Tuesday, according to crypto exchange platform CoinDesk.  

In a separate development, US-based mobile stock trading application Robinhood has lowered the minimum order size for Dogecoin due to rise in value of the meme-based cryptocurrency. It has lowered the minimum order size from 10 dogecoin to 1 dogecoin, which would allow small investors to buy this crypto coin.

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Dogecoin delivers staggering return of 20,000% in one year

Created in 2013 by software engineers Billy Markus and Jackson Palmer as a “fun” alternative to bitcoin, the digital currency has seen a stupendous rally in April, surging 200% last week and over 600% since the start of this month. Dogecoin has delivered a staggering return of around 20,000% over one-year period and 8,000% since the beginning of this year.

The rally in Dogecoin was seen at a time when other cryptocurrencies remained under stress as euphoria from Coinbase’s listing settled down. In the last 24 hours, cryptocurrency giant bitcoin rose 1.5% to US$55,233, while Ethereum was trading at around US$2,286, up 9%.

Good Read: A glance at five Important Cryptocurrencies other than Bitcoin and Ethereum

What’s fuelling the Dogecoin rally?

Dogecoin price has surged nearly 200% during the last one week, thanks to Tesla Chief Elon Musk’s cryptic tweet. The tech billionaire has been tweeting in favour of a meme-based crypto coin.

In one of his recent Twitter posts, Musk shared an artwork by Spanish painter Joan Miro and tweeted, "Doge barking at the moon". The tweet garnered response from over 65,000 Twitter users, with many relating it to the cryptocurrency Dogecoin which has been one of the favourite topics of discussion on social media. 

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Earlier in February, the world’s second richest person had called Dogecoin a rival of giant cryptocurrency bitcoin. He had tweeted an instructional video with the caption “Ð is for Ðogecoin!’, which featured the digital coin’s mascot, Shiba Inu, a Japanese dog flying in a rocket and surpassing its peers such as Litecoin and Bitcoin.

Interesting Read: No funny business: Dogecoin’s journey from a joke to US$41 billion cryptocurrency

How Dogecoin is different from Bitcoin

Bitcoin and Dogecoin are the two most significant cryptocurrencies and have staged strong rallies this year.

Bitcoin is the world's most popular cryptocurrency and has a market cap of more than US$1 trillion. On the other hand, the market value of Dogecoin has risen from more than US$1 billion in January to US$51 billion in April, making it the fifth-largest cryptocurrency by market cap.

Started as a joke in 2013, Dogecoin is an open-source digital coin that is based on a fork of the Litecoin code. It was created as a ‘fun’ alternative to bitcoin and is based on a popular meme featuring a Shiba Inu dog, a Japanese breed.

Bitcoin has an upper limit of 21 million coins, while Dogecoin has no such limit, which means there are more than 100 billion dogecoins in circulation.

Also Read: Is A Sharp Dip In Bitcoin A Buy Call?