Dogecoin is an open-source peer-to-peer cryptocurrency that was featured in a meme shared by Elon Musk. The cryptocurrency has hit record highs in recent days after the meme was shared. Online communities are driving up the price of the digital coin according to experts, having spiked 91 percent according to price trackers after the SpaceX CEO tweeted about dogecoin. The current price indicates a 20,000 percent increase from this time last year.
But how high will dogecoin go? Express.co.uk speaks to an expert about future projections for the meme-inspired cryptocurrency.
Michael Kamerman, CEO of broker Skilling, said the “parody currency” often appeals to investors due to its status and popularity on social media and with celebrities.
He told Express.co.uk: “The resurgence in attention to Dogecoin, which was originally launched as a parody currency, may seem attractive to investors due to its volatility but for the currency to ever have intrinsic value, scalability and security issues need to be addressed.
“It’s moved by headlines, tweets, celebrity, or corporate endorsements and while that’s likely belittled by “traditional” investors, it’s what brings the masses to cryptocurrencies.
“The masses understand headlines, tweets, and endorsements and the masses will likely mature as crypto enthusiasts and begin to appreciate the movement for its more technical nuances.
“However, the main driver behind Dogecoin’s popularity is its online communities, coupled with support from high-profile business magnates like Elon Musk.”
Sam Onigbanjo, founding partner at the Capital Markets Academy said dogecoin is clearly on an uptrend.
The cryptocurrency expert told Express.co.uk: “Dogecoin is currently at £0.31 and in the short term will overtake £0.70 ($0.50).
“Its first major test will be passing the £0.72 ($1) mark which from all indications could happen before the end of July.
“Once this barrier is broken the next aim will be £7.19 ($10).”
He added: “Dogecoin is driven based on trading fundamentals and events such as celebrity endorsements and acceptance in major corporates, both of these are clearly on the uptrend and are therefore very foreseeable in 2021.”
When asked how high dogecoin could possibly reach, he said it is difficult to predict, but he does not believe it will overtake fiat money.
Mr Kamerman said: “Cryptocurrencies are here to stay but I do not think they will “overtake” a fiat currency.
“I think that the “traditional” financial world will have to embrace the technologies that underpin cryptocurrencies.
“That will start with the rise of central bank digital currencies. Those are already on the rise and will likely continue to gain more and more attention in the coming years.
“Whilst I cannot predict the market direction, I can hypothesize that the variables underpinning such run-ups in price will remain unchanged for the short-term.
“Right now, investors and traders are almost encouraged to take the risk.
“The FOMO factor is at fever pitch and everywhere you turn market exuberance still exists.”
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The Skilling CEO said volatility in the market could likely lead to consistent change with the currency, but he believes eventually it will taper off.
Mr Kamerman added: “In my view, volatility is likely to taper off in the coming years.
“Cryptocurrency is constantly picking up new traders and investors – both big and small.
“As the number of traders picks up, volume and liquidity will rise with it smoothing out the price action for all involved.”