After China’s crackdown on cryptocurrency mining saw major drops in Dogecoin, Bitcoin and Ethereum and crypto prices across the board on Monday and Tuesday, the market is now bouncing back.
Elon Musk, Tesla founder and tech magnate, took to Twitter on Thursday evening to joke with the platform’s founder, Jack Dorsey, after Dorsey posted about the Bitcoin community.
After Dorsey tweeted “The #bitcoin development community above all else” and a link to an event entitled ‘The B Word’, Musk’s jokey response elicited a popular online conversation between the two in which, despite Musk’s initial dismissals, they seemingly agreed to take offline and have in person at Dorsey’s event.
Musk’s tweets showing his continuous ‘Bitcurious’ approach to the world’s most famed cryptocurrency followed another joke he had posted earlier that evening (June 24) which poked fun at Bitcoin fans like Dorsey.
As usual, the tweets had a rippling impact across the crypto market – with Dogecoin being the greatest beneficiary as Musk’s apparent favourite coin.
The coin reportedly saw a 20% surge in its value last night (June 24) following Musk’s comments.
CoinDesk records shows that between 2.59am (BST) and 3.59am, Dogecoin price jumped from $0.273266 to $0.287530.
Despite falling slightly again this morning, it appeared to be ticking up again today along with Bitcoin, with both currencies rallying just days after a sweeping crash led to massive price drops for both coins.
Bitcoin fans and investors feared for the worst when the currency dipped below $30,000 in value on Tuesday.
Meanwhile, Dogecoin saw a 25% price drop in 24 hours between Monday and Tuesday as the Chinese goverment’s pledge to clamp down on the country’s huge crypto mining operations saw Bitcoin crash and drag smaller coins down with it.
Particularly, usual trading trends of ‘hodling’ (refusing to sell or exchange cryptocurrency when prices plummet) and ‘buying the dip’ seemed to be under greater strain as the continuing Chinese crackdown suggests more volatility for the market over a prolonged period.
What is Dogecoin and what happened this week?
Much like Bitcoin, Dogecoin is an open-source cryptocurrency which can be traded and exchanged across decentralised peer to peer networks between users, with tokens of value reaped as rewards for users operating in lieu of banks or governments to ensure the validity of its transactions.
Where this coin differs to Bitcoin, Tether or Ethereum is that it has spread like wildfire on account of its meme origins and appreciation by Tesla founder and cryptocurrency aficionado Elon Musk.
The irreverent tech billionaire earlier this year sent the crypto market into a tailspin when he announced that Tesla would be suspending bitcoin payments for its vehicles due to the currency’s considerable environmental impact.
Video: Bitcoin Prices Sink After Elon Musk Posts Breakup Meme (The Independent)
The familiar shiba inu ‘doge’ meme which fuelled the rise of Dogecoin has been circulated far and wide across the internet for years, making its way into the cryptocurrency market in 2013 as a satirical take on the booming popularity around more traditional coins like Bitcoin.
But the coin has come full circle, with it now being taken just as seriously as its crypto competitors after its visibility increased worldwide over the last few years.
Even co-founder Billy Markus made the decision to invest in the coin which he and software engineer Jackson Palmer created eight years ago for the first time.
On Tuesday Markus tweeted: “I stopped buying crypto in 2013 (bitcoin buying and selling).
“I never bought dogecoin, I mined it.
How much is it worth today?
Dogecoin’s price bounced back from the red on Tuesday night and Wednesday morning after CoinDesk recorded a 24 hour low for the coin of £0.117023.
Today, its value is fluctuating around a more stable threshold of £0.184540 ($0.257448) – with the coin now up over 7% on the last 24 hours.
Tuesday’s figures saw the coin’s biggest dip in the last 30 days after its value skyrocketed in May to an all time high of £0.533187.
The continuing hype around Dogecoin in particular looks to keep it as stable as possible despite the coin’s considerable volatility.
What’s next for Dogecoin? How are Ethereum and Bitcoin doing?
Dogecoin price predictions following this latest tumble have put hopes of the coin finally reaching $1 worth or above anytime soon slightly further out of reach.
The closest the cryptocurrency has come to nearing that landmark threshold was seen in early May, before China’s latest moves to stunt the flow of transactions and mining began to shake the market.
While recovering profits are good news for investors and crypto fans, this latest bout of volatility has added to rising fears over the long term health and sustainability of the crypto market and whether there’s more instability to come.
Bitcoin fell below $30,000 on Tuesday to a 24 hour low of $28,814.75, putting it at the lowest value since the year began.
Several big players in the market have been keen to make the most of falling profits despite concerns around increased volatility, with Microstrategy CEO Michael Saylor buying over 100,000 Bitcoins valued at over $3 billion on Monday.
Ethereum, the currency dominantly associated with the controversial tech trend of NFTs, is trending downwards today along with Cardano and XRP.
Its price yesterday (June 23) dipped by 3%.
Additional reporting by Reuters journalist Julien Ponthus