Dogecoin, a digital currency created to be humorous following an internet meme that went viral, now boasts a market cap of over than $1.1 billion.
Experts believe that Dogecoin’s increase in value, along with alternative coins, is a direct result of people looking for cheaper coins in comparison to Bitcoin or Ethereum.
Dogecoin skyrocketed to over 400 percent last month, briefly rising to a value of $0.0107 in late December.
The cryptocoin is considered to be an, “altcoin,” which is a peer-to-peer digital token that has descended from Bitcoin. Top examples of other altcoins include Ethereum and Ripple, which rose in value by 35,000 percent last year.
Dogecoin was created in 2013, and is represented by the picture of a Japanese Shiba Inu dog that was made popular through an internet meme back in 2010. Dogecoin’s creators advertised the digital coin as an internet currency that allowed users to send money online more easily.
There are many different ways to acquire Dogecoins. Investors can purchase them through online exchanges, receive tips in that currency, or mine them.
One of the project’s original creators has voiced concern about Dogecoin’s quick rise over the past few months, because he worries about market excess. Jackson Palmer, who left the team in 2015, shared that it was interesting that the token could see such a huge jump in price when no software update had been released in more than two years.
According to CoinMarketCap, the overall value of cryptocurrencies is more than $750 billion, and Bitcoin dominates almost 40 percent of that market.
“The most significant contributing cause for altcoins to rise so parabolically is owing to the perception of ‘cheap’ coins,” explained Dave Chapman, the managing director at Hong Kong-based commodities and digital assets trading house, Octagon Strategy.
He went on to explain that, “the two most well known cryptocurrencies are considered too expensive for most new entrants. Despite being able to purchase a fraction of each, there is a real psychological barrier around owning something in its entirety.”
According to Chapman, an investor would rather own 2,000 Ripple coins that cost around $6,000, rather than own less than half of a Bitcoin for the exact same price.
Chapman also explained that many new investors believe they have missed out on the money making opportunity with cryptocoins that have already experienced phenomenal returns.
Across the crypto world, many altcoins are enjoying the limelight as investors rush to make it big off the next major coin.