The price of Dogecoin continues to skyrocket, creating and breaking all-time highs almost every other week since the beginning of the year. The latest all-time high was set in the first week of May, coming off the heels of the announcement that Telso CEO Elon Musk will host an edition of NBC’s Saturday Night Live. Musk, a self-proclaimed ‘Dogefather’, has been harping up the prospects of the digital coin to his followers on social media, and will most likely drive up demand for the crypto if he talks about it on national TV.
So far this year, Dogecoin has enjoyed a phenomenal price rally that has seen its value surge by a brain-numbing 12,000%, according to CNBC figures.
To put this in perspective, if you invested $1,000 in the meme-based crypto at the beginning of this year, you’d be sitting on digital assets worth $121,052 today. This totally eclipses the price rally of the leading crypto currencies bitcoin – which has appreciated by 95% – and ether which experienced a 369% price increase.
However, tokens like dogecoin are known to be extremely volatile and many experts warn that dogecoin’s bubble could go burst at any moment. Experts like Adam Zadikoff, chief operating officer at BRD, a popular crypto wallet with a base of over 7 million users, have warned about investing in Dogecoin with money you can’t afford to lose.
“My guess is that [the rally] won’t last, especially for something like dogecoin which was never meant to be a payment system or a store of value,” Zadikoff sounded off a warning during an interview with CNBC. “Yes, you can make a quick buck if you time it right, but timing the market is a terrible thing to try to do. It does not work.”
Zadikoff and other industry experts believe that unlike other traditional cryptos like bitcoin and ether, Dogecoin’s value isn’t grounded on economic infrastructures that incentivize people to buy into it. Rather, Dogecoin’s rally has been driven by sentiments on Twitter and Reddit.
“You see the power in social media to move people to do something en masse,” Zadikoff revealed. “This is the flash-in-a-pan thing that people are getting behind right now.”