Dogecoin (DOGE) hogged the spotlight on a tightly crowded stage throughout most of 2021, as Bitcoin (BTC) and the wider cryptocurrency market climbed to new all-time highs.
Fueled by the social media hype and the coordinated efforts of strategic Reddit traders, the popular meme coin has risen 15,000% in value since its peak in early May.
The Early Boom
As the price of the meme coin skyrocketed, so did its commitment to a large number of internet users who have never heard of a cryptocurrency that even industry insiders believe was dead eight years ago.
It all started in early May when the Dogecoin search volume recorded by Google Trends rose to the same level as Bitcoin. Search volume for these two terms was the same in the first week of May when the meme coin rose to a record high of $0.73. In January, searches for Bitcoin exceeded Dogecoin by more than 8,000%.
The Doge’s presence was predictably boosted on Twitter too, where the self-proclaimed Dogefather Elon Musk’s tweets regularly caused Dogecoin mentions to outnumber those of Bitcoin. Data from Bitinfocharts shows that the highest peak mentioned by Dogecoin Twitter occurred in late January when Reddit traders selected Dogecoin as the cryptocurrency for GameStop.
The price of Dogecoin rose more than 300% that day. Twitter recorded about 944,000 tweets containing the word Dogecoin. At that time, Musk published a meme with the word “Dogue” as a modification of the name of the fashion magazine “Vogue”, which many believed at the time to be implicit support for the pump. And then the rise of the ” Dog Coin” started. During the hype, new millionaires were created out of nowhere, while others lost their savings by following their hero Elon Musk.
As with the law of gravity and everything else, what goes up, must come down. This happened to the meme coin with its valuation falling by more than 60%. With this fall, so did its performance on the media stage. After Dogecoin peaked in early May, its search volume on Google fell by 90% as a large number of casual internet users moved on. Everyone stopped talking about Dogecoin.
Dogecoin Transactions on the Low
If you check some stats, you will also find that some Dogecoin usage stats have fallen even beyond the recent drop in prices. We usually expect Dogecoin trading volume to be lower than this year’s bull market, but according to Bitinfocharts data, its daily trading volume recently hit a nearly three-year low of under 20,000. Does this suggest that despite the media hype, people have lost trust in the meme coin as a usable cryptocurrency? This could be the case.
Dogecoin was often subject to large fluctuations in transactions, fees, and the value of the currencies traded on its blockchain. Since May, when an account sent more than $82 billion through the blockchain in a single day, the daily transaction volume of Dogecoin has declined, reaching $4.4 billion on June 14. In the multi-billion dollar campaign mentioned above, transaction fees increased 25,000% from $0.01 to $2.52. The subsequent decline in blockchain usage brought costs back down to $0.60.
While the price of the meme coin and its appealing attention seem to be in the low, it will be foolish to bet against its resurgence in the following months or years to come.
Earlier this week, the non-fungible token of the Dogecoin Shiba Inu image was sold for $4 million in Ether, suggesting that the hype has not yet cooled completely. A poll conducted in May found that more Americans have heard of Dogecoin than Ethereum.
Only time will tell if the popular meme coin will ever hit the $1 mark it has teased over the last few months.