wow. much moon. very crypto. so fomo.
The story of Dogecoin may center on a fluffy shiba inu from Japan who hit the big time as a meme in 2010, but it’s a tale that’s got all the hallmarks of a blockbuster drama — a stunning rise, a crushing blow and a surprise comeback… fueled by a man who wants to go to space.
Buckle yourselves in for the full story of DOGE, and how a cryptocurrency that was started as a joke ended up with a multibillion-dollar market cap.
“LMBO LOOK @ THIS FUKKEN DOGE”
Atsuko Sato, a Japanese teacher, was minding her own business when she posted photos of Kabosu on a blog. But there was one picture of the rescue dog that caught the imagination of someone on Reddit. Resplendent and fluffy, it showed Kabosu staring sideways into the camera, eyebrows raised, one paw over another.
The post gained modest traction — but it really hit the big time when a Tumblr blog called Shiba Confessions burst on to the scene. It was here that a flurry of colorful but grammatically incorrect statements in Comic Sans were added onto the image.
Doge spread through the internet like wildfire — appearing in a Google easter egg, on endless T-shirts and coffee cups, and even in adverts for Sweden’s transport network. (I’d never thought I’d use such a crazy combination of words in one paragraph.)
Anyway, all of this mania brings us neatly to why we’re here. There was another innovation that emerged during Doge mania: Dogecoin.
Part I: Dogecoin Is Born
The crypto landscape was very, very different back in 2013. As this historical snapshot from November of that year shows, several coins that were in the top ten back then are no longer major players in this fast-moving industry.
Jackson Palmer, an Adobe engineer, was watching the space with bemusement. Although he liked the idea of Bitcoin, he wanted to satirize the hype that was surrounding the crypto sector as a whole. Palmer wanted Dogecoin to be a joke — hoping to highlight the ridiculousness of throwing huge sums of money behind something so unstable. With the technical knowhow of Billy Markus, an IBM software developer, DOGE hit the markets on Dec. 6, 2013.
Even though both men had aimed to make DOGE as ridiculous as possible, with features such as a circulating supply of 100 billion tokens, investors flocked to the joke coin. Within two weeks, Dogecoin’s price had trebled. The following month, a loyal band of DOGE hodlers donated $30,000 in DOGE to the Jamaican bobsled team so they could travel to the Winter Olympics in Sochi. Fast forward to Dec. 6, 2014 — a year after its surprise debut — and it was the world’s sixth-largest cryptocurrency, with a price of $0.0002295 and a market cap of $22,144,496. Ethereum hadn’t even launched yet.
Part II: The Wilderness Years
Unfortunately, the fun wasn’t going to last. By 2015, Palmer had announced that he was taking an extended leave of absence from the world of crypto — describing aspects of the industry as “toxic.” He told CoinDesk at the time that he resented how a number of opportunists were trying to get rich by “coming up with half-baked, buzzword-filled business ideas,” and lamented at how a number of people had lost money.
Trading volumes dropped in the years that followed, and active development on the protocol ground to a halt. Newcomers who learned the ropes with Dogecoin were moving on to other cryptocurrencies, and Palmer was confident that DOGE would eventually fade away.
As with other altcoins, DOGE surged as the 2017 bull run reached its dramatic climax — hitting an all-time high of $0.018773 on Jan. 7, 2018. Palmer wasn’t impressed, writing on Twitter at the time:
“I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn’t released a software update in over two years has a $1 billion market cap.”
Indeed, his fears about the largess of the crypto space were founded. The crypto winter subsequently set in… and within three months, Dogecoin had fallen by 85% to lows of $0.00265.
Part III: The Comeback
Back in 2017, the official Twitter account for China Central Television tweeted: “RIP, Doge! Shiba Inu who inspired popular internet memes died in Japan aged 16.”
It turned out to be an April Fool’s Day joke… albeit not a very funny one. Kabosu’s owner, on her official Instagram account, confirmed that she’s alive and well — and provided a video of her monching on chimkin. In fact, it wasn’t rumors of Kabosu’s death that had upset the hooman… it was the fact that people had mistakenly assumed that the dog was a boy. (We’re delighted to confirm that Kabosu is alive to this day, albeit looking slightly older, and has clearly taken to licking fridges.)
The scare provided by the April Fool’s Day prank serves as a handy metaphor for the next stage of the Dogecoin story. Why? Because reports of DOGE’s death had also been greatly exaggerated. In 2020, the quiet bark of Dogecoin grew ever louder as the altcoin made its way up the rankings once again.
DOGE’s triumphant return was, in part, linked to a bizarre new craze that had emerged on TikTok. Last summer, a user went viral by championing the #DogecoinTikTokChallenge. In a video, he had said:
“Dogecoin is practically worthless. There are 800 million TikTok users. Invest just $25. Once the stock hits $1, you’ll have $10,000. Tell everyone you know.”
Given how DOGE was languishing at $0.0023 at the time, this seemed like a tall order. It’s also, er, not a stock. But the campaign, which some feared amounted to a pump and dump, did appear to move the dial. Prices ended up reaching $0.0053 — up 130% on where they were before. But some young investors ended up licking their wounds after they fell back soon afterwards.
The real fireworks were yet to come. For reasons beyond understanding, Dogecoin has one very high-profile admirer: Elon Musk, one of the world’s richest men.
Last December, DOGE spiked by 20% after the Tesla CEO tweeted “One word: Doge.”
A series of tweets followed throughout January and February. Musk described DOGE as the people’s crypto, posted Photoshopped pictures from The Lion King where he appears alongside the world’s most-famous shiba inu, and even revealed that he had bought DOGE for his baby. Kiss frontman Gene Simmons and Snoop Dogg even got in on the action.
DOGE ended up hitting a staggering all-time high of $0.08495 — beating its previous record by a staggering 352%. The surge was covered by major news outlets, bemused by how the altcoin had managed to comfortably outperform Bitcoin and Ether by posting year-to-date gains of 1,624%. You’ve just got to hope that a few TikTokkers had held on to their crypto.
But what of those who founded Dogecoin? One of them — Billy Markus — spoke out after the latest surge… and revealed that he had actually sold all of his crypto stash back in 2015, for an amount that was equivalent to the value of a used car. He too said that the community had “started to strongly shift from one that I was comfortable with.” There’s little doubt that he would be an exceedingly rich man if he had decided to hold on to it.
In an open letter on the Dogecoin subreddit, he said that he couldn’t comprehend the prospect of DOGE hitting $1 — a feat that would its market cap bigger than the likes of Starbucks, American Express and IBM. And he made an impassioned plea for Dogecoin to be a force for good. He wrote:
“Pump and dumping, rampant greed, scamming, bad faith actors, demanding from others, hype without research, taking advantage of others — those are all worthless. Worse than worthless, honestly, bringing more negativity to an already difficult world.”
What Next for DOGE?
With Musk continuing to tweet about Dogecoin intermittently, an event that never fails to move the market, DOGE has managed to cling on to most of the gains seen in early 2021... with a market cap of above $6 billion. The protocol underpinning the altcoin has also undergone its first protocol upgrade in several years.
Looking ahead, there are concerns about the fact that most of DOGE’s circulating supply is in the hands of a few. One address owns 28% of all Dogecoin in existence, worth a staggering $2.1 billion. The top 20 holders have control of half of its supply, too.
Despite its jokey image, some argue that Dogecoin is well-suited to making payments because of how transaction fees are low — something that can’t be said for Ether right now. Others warn that DOGE will eventually fade away once again, and fall back below a cent to where it used to be. As Flipside Crypto warned in a recent CoinMarketCap piece:
“We should be very cautious about the longevity of this particular spike.”
