What Happened: Meme-based cryptocurrency Dogecoin surged 231% overnight to a high of $0.43 even as the majority of other cryptocurrencies, including Bitcoin, witnessed a pullback in price.
Trading volume for the cryptocurrency was up 222% to $45 billion over the past 24-hours, making it the most traded cryptocurrency after Bitcoin.
With over $40.5 billion in market cap, Dogecoin has now overtaken leading cryptocurrencies like Polkadot and Uniswap to become the seventh-largest cryptocurrency by market cap.
Why It Matters: DOGE’s rally has returned more than 5000% to investors since the beginning of 2021, and about 12,600% over the course of one year.
Although this makes a case for DOGE as one of the best investments of the year, most investors, including popular crypto traders, were at a loss for words to explain the cryptocurrency’s rally.
“When will people understand, Dogecoin is not representative of crypto,” said one trader on Twitter, adding, “Dogecoin is far too expensive and only new investors buy it, if anything it’s a market indicator that signals new retail investors have arrived.”
If DOGE were to continue its rally and hit a price of $1, it would overtake BNB to become the third-largest crypto by market cap after Bitcoin and Ethereum. While some investors were dismayed by a cryptocurrency with “no real utility” surging in price, others used saw it as a unique short-term investment opportunity.
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