The hottest cryptocurrency right now is a joke.
The coin, inspired by a meme about the inner dialogue of an easily astonished shiba inu, has skyrocketed in popularity thanks to Elon Musk and other celebrities promoting the token. Musk, who has frequently tweeted about dogecoin, is set to host "Saturday Night Live" this weekend and has suggested he'll feature the currency on air.
The impending pop-culture moment has only added to the cryptocurrency's momentum. The price of the token has soared more than a hundredfold this year. The rapid rise has attracted some of the same traders who swarmed meme stocks this year — and some of the same online brokerages they use, including Robinhood, Webull and eToro, are also trying to profit from the dogecoin phenomenon.
The dogecoin in circulation is now worth more than $70 billion, making it the fourth most-valuable crypto after bitcoin, ether and Binance coin, according to CoinMarketCap. On Tuesday alone, Dogecoin spiked nearly 50% in price.
Musk tweeted in December: "One word: Doge." The price of one dogecoin was $0.0045 then. It's now worth a hundred times that.
In January, dogecoin's price jumped further after chatter on the r/SatoshiStreetBets group on Reddit sought to turn it into the next GameStop. Other celebrities such as Snoop Dogg and Gene Simmons also jumped in with support.
Some of the same dynamics that drove GameStop and other stocks have driven dogecoin: a social media-inspired rally that's not necessarily based on any underlying investment thesis. Dogecoin has been around for seven years, after all.
One reason dogecoin is taking off now, though, may be the increased ease of trading in the cryptocurrency. Robinhood added support for dogecoin trading in 2018. Webull started trading on April 20. EToro, which is in the process of going public through a SPAC deal, added dogecoin on Monday.
Coinbase allows users to hold dogecoin in their crypto wallets, but it doesn't support trading.
The surge of dogecoin interest was so strong that in April it crashed Robinhood's ability to handle crypto trades. Robinhood also had a "partial outage" in crypto trading Tuesday amid a dogecoin spike.
The coin, originally called Bells, was based on the Animal Crossing game. It later changed its name to dogecoin to ride the shiba inu dog meme, where a canine delivers side eye along with ungrammatical interjections like "much wow."
Even co-creator Billy Markus said the current surge "doesn't make sense," telling the Wall Street Journal that dogecoin's "design was absurd and it was meant to be absurd."
Dogecoin was based on the litecoin token. Joking aside, it's a real cryptocurrency that can be traded for other digital currencies, exchanged for dollars or other fiat currencies, or used for payment. Mark Cuban's Dallas Mavericks and the Oakland Athletics baseball team have announced that they accept dogecoin.
"Dogecoin is the loudest reminder of how people are investing today — a real mix of investing for returns and utility, versus investing as consumption and identity," said Monica Desai, a partner at Kleiner Perkins. "Crypto is in many ways an investment meme category, and dogecoin is the ultimate crypto meme."
"I think this is just an extension of the movements around [r/WallStreetBets] and alternatives like collectibles — like those there will be winners and losers but they represent a lasting cultural change," Desai said.
Gemini, a crypto exchange, started taking dogecoin deposits Tuesday and said it would add trading soon.
"Dogecoin continues bitcoin's tradition of giving the control of money back to the people," CEO Tyler Winklevoss wrote in a blog post about Gemini's embrace of dogecoin. "Yes, it's a meme coin, but all money is a meme."