THE price of Dogecoin is up around 3% over the past 24 hours, but remains down from a record high.
What is Dogecoin and why is the cryptocurrency going up? We explain what you need to know.
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But first, a word of warning: buying cryptocurrencies as well as stocks and shares is a very risky business.
Investing is not a guaranteed way to make money, so make sure you know the risks and can afford to lose the money.
Cryptocurrencies are highly volatile, so your cash can go down as well as up in the blink of an eye – you can lose all the money you put in.
What is Dogecoin?
Dogecoin is a cryptocurrency which was launched in 2013.
Originally invented as a joke by software engineers Jackson Palmer and Billy Markus, Dogecoin has the image of a Shuba Inu dog as its logo.
It has been marketed as the "fun" version of bitcoin.
Two weeks after its launch, the value of it jumped 300% after China banned banks from investing in cryptocurrencies, according to Investopedia.
Dogecoin then skyrocketed alongside other cryptos during the bubble that peaked in 2017, and it fell with the rest of them over 2018.
On April 16 this year, Dogecoin reached its highest value yet of $0.4377 per coin, according to crypto data firm CoinMarketCap.
Why is the Dogecoin price going up?
Dogecoin has received backing from celebrities including Elon Musk and Snoop Dog, pushing up the price.
Dogecoin is not the only cryptocurrency that's rocketed in price this year.
Bitcoin, the world's largest cryptocurrency, Ethereum and Ripple's XRP have surged this year too, but just like Dogecoin they have also pulled back from record highs.
Backing from famous faces and established financial companies like PayPal have sent prices rising this year, along with Coinbase floating on the stock exchange.
Coinbase is a cryptocurrency exchange platform and is the first to go public, marking a major milestone for digital currencies.
Analysts have warned that Dogecoin's surge is a bubble that has to burst after hitting a record high.
Dogecoin is trading at $0.2733 at the time of writing on Tuesday April 27 and is up around 3% over the last 24 hours.
But dogecoin is down around 33% over the past seven days and 37% from its all-time high.
The price of Dogecoin is volatile, which means it can rise and fall sharply from one day to the next – and it's done just that in recent weeks.
How has Dogecoin's price changed?
Earlier this year, Dogecoin hit headlines after its value soared.
At its height on February 7, Dogecoin was trading for $0.085 6.1p) per coin, according to crypto data firm CoinMarketCap.
But it dropped by as much as 20% a week later, trading at $0.056 (4p) by February 15.
It soared to record highs after entrepreneur and Tesla chief executive Elon Musk tweeted about the cryptocurrency.
Other famous people including Snoop Dogg and investor Mark Cuban have also tweeted their support of Dogecoin.
Dogecoin started surging in 2021 on January 29, jumping by a staggering 972% from $0.007 (less than 1p) the day before.
That was off the back of a bunch of Reddit threads calling for it to hit a value of $1 per coin.
The target was an attempt to mirror a share surge in heavily shorted companies like GameStop.
Shares in GameStop soared by a staggering 700% earlier in January.
Shares rocketed after an army of amateur traders targeted the games retailer, causing professional hedge funds who'd shorted it to lose billions.
But for the amateur traders, the surge saw them make some serious cash.
In simple terms, "short selling" is when professional investors borrow shares of stock to sell, and then buy them back at a lower price.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
Following GameStop's share surge, Reddit users on other threads referenced WallStreetBet's effort to squeeze out Wall Street hedge funds and urged people to buy into Dogecoin too.
One thread, titled “Dogecoin is the next GME/Bitcoin” (GME is GameStop), said getting Dogecoin to $1 a coin would be "an incredible achievement".
It added it would "completely change the crypto market… Dogecoin to the moon."
Dogecoin also received a boost after it was tweeted by an account called "WSB Chairman", which insists it isn't associated with the Reddit group.
Brits are being warned they risk losing all of their money if they invest in bitcoin and other cryptocurrencies.
It comes after a ban on some crypto-related investment products.
From Dogecoin and Litecoin to Bitcoin – here are the different cryptocurrencies explained.
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