What is Dogecoin and why is the price going up?
Alice Grahns
Hollie Borland
Lynsey Barber
Lucy Alderson
Published: 11:38 ET, Apr 25 2022
Updated: 9:30 ET, Oct 27 2022
DOGECOIN was a meme cryptocurrency before it was a big hitter - but where is it now?
After an unstable start to the year, the coin's price is surging amid news that Elon Musk - one of Doge's biggest proponents - is buying Twitter, and is now sitting at $0.165.
We explain what you need to know about Dogecoin and its volatile rises and fallsCredit: Alamy
This is how it got there.
But first, a word of warning: you can lose all the money you put in to Dogecoin and other cryptocurrencies, as well as investments related to them.
Buying cryptocurrencies, like any investment, is a very risky business and making money is never guaranteed.
As the volatile price of Bitcoin showed today, anyone who tells you they know what's going to happen to cryptocurrencies is lying.
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You should make sure you know the risks of investing in cryptocurrencies and that you can afford to lose any money you put in.
Cryptocurrencies are highly unpredictable, so the value of your investments can go down as well as up in the blink of an eye.
What is Dogecoin?
Dogecoin is a cryptocurrency first launched in 2013.
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Dogecoin has the image of a Shiba Inu dog as its logo.
The image became a popular internet meme called doge, and it features the dog surrounded by text in the comic sans font with words like "much wow".
Software engineers Jackson Palmer and Billy Markus originally created Dogecoin as a joke based on this meme.
It has been marketed as the "fun" version of Bitcoin, gaining value and eventually attracting more serious interest.
Two weeks after it first launched, its value 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 during 2018.
In May last year, Dogecoin reached its highest value yet of $0.7, according to crypto data firm CoinMarketCap.
Why is the Dogecoin price going up?
In the wake of the news that Elon Musk would be buying Twitter, Dogecoin's price jumped from $0.125 to $0.165 in less than 12 hours.
Musk's deal with Twitter has no direct correlation to Dogecoin, but he tweeted on April 9 about hypothetically letting users pay for Twitter Blue with Dogecoin.
The tech billionaire has previously embraced Dogecoin, and his actions have helped spur some of its price changes.
Dogecoin's price went up by as much as 30% to $0.2175 in December 2021 after Musk said that his firm Tesla would start accepting the coin as payment for its merchandise.
However, that did not include its cars.
The price has fluctuated around $0.15 and $0.12 since the start of 2020, and this is just the second day since February that its price surpassed $0.155.
Now it is sitting at $0.165 and is still down 18% in the past 12 months despite a roughly 25% surge on April 25, according to Coindesk.
Dogecoin received backing from celebrities like Musk, which has helped to push up the price.
But Dogecoin experienced lows as well.
Musk's appearance on Saturday Night Live in the US earlier this year saw the price of Dogecoin plummet for a brief period of time.
Dogecoin's price was over $0.70 on the Saturday of the show, but shortly after Musk's mention of the cryptocurrency, the price fell, hitting $0.47.
Dogecoin then enjoyed a surge in the summer after it was announced that a well-known cryptocurrency platform would accept the coin.
Customers who use eToro - and there are around 20 million of them globally - can buy and sell Dogecoin.
Yet Dogecoin's moment among the big crypto hitters didn't last, as its over-reliance on short-term trends meant serious investors avoided it.
From just under $0.3 in late October 2021, Doge is down nearly 50%.
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.
Meanwhile, Bitcoin has had a tough start to the year.
Its price hit record highs in 2021 as cryptos boomed, aided by backing from Elon Musk, interest from major financial institutions and support from major tech finance firms including PayPal.
But regulations and opposition in India and China saw the value plunge.
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For more on the relationship between Musk and Dogecoin, The Sun has covered their history here.
Keep up to date with the top cryptos in 2022.
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