Dogecoin continued to defy critics – and gravity – on Friday, after major boosts from the world’s biggest cryptocurrency exchange Coinbase and its main hype-man Elon Musk.
Coinbase, which went public in a coming-of-age moment from the crypto world in April, said on Thursday it planned to start offering dogecoin trading on its app in six to eight weeks.
The exchange’s chief financial officer Alesia Haas told CNBC: “We want to offer all assets that meet our listing standards and we hope to be the place where you can come and trade anything that you want to trade.”
It followed moves by trading platforms eToro and Gemini to add dogecoin, fueling the rally earlier in May and showed the growing acceptance of the joke cryptocurrency.
But it was Musk’s latest tweet that powered the newest rebound in dogecoin, which had slipped considerably from all-time highs of above $0.70.
Musk has halted Tesla payments with bitcoin but has said he is looking for more eco-friendly alternatives. He tweeted on Thursday night: “Working with Doge devs to improve system transaction efficiency. Potentially promising.” Dogecoin promptly soared and was up 33% to $0.53139 on Friday morning.
Dogecoin’s rally earlier in May captivated retail traders and unnerved many traditional investors, who saw it as a sign of irrational behaviour spurred on by huge amounts of stimulus from governments and central banks.
Many bitcoin enthusiasts quickly became tired of the joke token stealing the crypto headlines.
Barry Silbert, founder and chief executive of the company that owns Grayscale, the world’s biggest crypto fund manager, announced his company was betting against the token and tweeted: “Okay $DOGE peeps, it’s been fun. Welcome to crypto! But the time has come for you to convert your DOGE to BTC.”
Billionaire investor-turned-crypto-evangelist Mike Novogratz admitted he had misunderstood dogecoin’s appeal. But he nonetheless told Bloomberg TV he thought it’s “very dangerous to be invested” and that it was a “retail frenzy” with no institutional backing.
Analysts have consistently warned dogecoin is a purely speculative asset, and is even more risky than the already highly volatile bitcoin.
But predictions that dogecoin will suddenly crash have so far been wide of the mark, with the token continuing to draw life from celebrity buzz and online meme culture.
However, there are plenty of obstacles ahead for dogecoin and the cryptocurrency world as a whole. Not least Musk himself, who is liable to sudden changes of heart when it comes to his enthusiasms.
Nic Carter, founding partner of blockchain investment firm Castle Island Ventures, was scathing about Musk’s claim to be working with dogecoin developers, suggesting they don’t exist.
He tweeted a picture of a man talking to a brick wall, captioned: “Elon working with the doge devs.”