Dogecoin (DOGE-USD) has soared almost 200% to a new-all time high of $0.3922 (£0.28), riding a broader wave of interest in cryptocurrencies that has been cresting in recent days.
The cryptocurrency, which first started up as a joke in 2013, now has a market cap of more than $50bn thanks to the recent surge.
It puts the coin in the top 10 most valuable cryptocurrencies when measured by market capitalisation, and above several major banks such as Barclays (BARC.L), which has a market cap of $44 billion.
Popular US retail trading platform Robinhood, which was at the centre of the Gamestop (GME) and AMC (AMC) trading dramas at the start of the year, was on Thursday accused by users of restricting trading in Dogecoin.
Users said Robinhood had stopped instant deposits for crypto purchases so they could only buy with funds already in their accounts. Robinhood said it took the decision "due to extraordinary market conditions."
Robinhood has since said it was “experiencing issues with crypto trading”. It tweeted: “No, we didn’t place restrictions on $DOGE trading. This is false information.”
Dogecoin’s rise has coincided with a surge of populism in financial markets around the world and a revival of interest in cryptocurrencies. Bitcoin (BTC-USD) and ethereum (ETH-USD) — the world's two biggest cryptocurrencies — both reached new all-time highs this week, a rally that coincided with the stock market listing of Coinbase (COIN).
Dogecoin takes its name and logo from the Shiba Inu dog in the “doge” meme that became popular on the internet in the early part of the last decade. The crypto can be used for payments in much the same way as bitcoin but is far smaller and less well known or used.
Other celebrities have begun tweeting about the token following the attention from Musk. Snoop Dogg has also buoyed up the price of the joke token, as has KISS singer Gene Simmons.
Musk has said his frequent tweets about Dogecoin are jokes.
“Dogecoin’s rise is a classic example of greater fool theory at play, Dogecoin investors are basically betting they’ll be able to cash out by selling to the next person wanting to invest. David Kimberley, analyst at Freetrade, said. "People are buying the cryptocurrency, not because they think it has any meaningful value, but because they hope others will pile in, push the price up and then they can sell off and make a quick buck."
He added: "But when everyone is doing this, the bubble eventually has to burst and you’re going to be left short-changed if you don’t get out in time. And it’s almost impossible to say when that’s going to happen.
"This is doubly the case in the crypto markets where a small group of players often hold a huge chunk of the total number of ‘coins’ in circulation. That means it only takes one person to dump all their holdings for the entire market to tank."
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