For those who do not subscribe to the Jamie Dimon school of thought on the matter of cryptocurrency, watching bitcoin’s meteoric rise (and fall, and rise) over the past several months has been an exercise in both fascination and regret. But if you’re kicking yourself for not jumping on the cryptocurrency train before doing so required taking out a second mortgage on your home, the good news is that there’s still plenty of opportunity to buy some bitcoin (or the equally popular and expensive ethereum, which increased 35,000 percent in value last year). Altcoin dogecoin, which recently topped $1 billion in value, is still considered a relative bargain. Before you dive in, however, there are a few caveats to consider:
- Dogecoin was created as a parody based on a popular Internet meme (its mascot is a Japanese Shiba Inu).
- According to CNBC, “the project hadn’t released a software update in over two years.”
- Jack Palmer, who founded what essentially began as a joke before leaving the team in 2015, is concerned about market excess and doge’s sharp jump in price.
So why are investors throwing money at dogecoin? Because, said Dave Chapman, managing director at commodities and digital assets trading house Octagon Strategy, they’re afraid they’ve already missed the boat on more mainstream iterations of cryptocurrency. “The two most well-known cryptocurrencies (i.e., bitcoin and ethereum) are considered too expensive for most new entrants,” Chapman told CNBC, adding, “Despite being able to purchase a fraction of each, there is a real psychological barrier around owning something in its entirety.”
Dogecoin’s overnight surge in valuation seems to be yet another sign of the cryptocurrency craze, which drove shares in an iced-tea manufacturer to spike almost 300 percent after it changed its name to “Long Blockchain.” Even Palmer greeted the news with an incredulous head-shake: “I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure,” he told cryptocurrency news website Coin Desk. “But I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn’t released a software update in over 2 years has a $1B+ market cap.”