Dogecoin’s Rally Reminds Crypto Bulls of Simpler Times

Carly Wanna, Bloomberg News

KATWIJK, NETHERLANDS - JANUARY 29: In this photo illustration, visual representations of digital cryptocurrencies, Dogecoin and Bitcoin are arranged on January 29, 2021 in Katwijk, Netherlands. (Photo by Yuriko Nakao/Getty Images) , Photographer: Yuriko Nakao/Getty Images Europe

(Bloomberg) -- The hottest cryptocurrency is a token bearing the face of a Shiba Inu meme that is currently trading near 13 cents.

Dogecoin, a long-time favorite of billionaire Elon Musk, has gained 100% this past week, far exceeding the advances of the world’s two largest tokens, Bitcoin and Ethereum, up around 6% and 17%, respectively. That surge makes Dogecoin a top performer among the 10 largest coins by market capitalization, according to CoinMarketCap.com Monday morning.

Dogecoin has been known to surge and plummet despite the performance of other digital assets. Its volatility has mainly been driven by the retail-trading mania.

During the crypto bear market of 2018, for example, the memecoin nearly tripled in value over a 30-day period, while Bitcoin’s price barely changed in that time.

Dogecoin’s rally comes as Musk completed his $44 billion acquisition of Twitter Inc. The Tesla CEO has expressed his support of the meme coin in the past via tweets like “Who let the Doge out” and his embrace of the nickname, The Dogefather.

Kunal Goel, a research analyst at Messari, said that some traders believe Musk will integrate the token into the platform and “drive Dogecoin’s adoption.”

However, Musk’s commitment to cryptocurrencies has wavered, and it’s unclear if he plans to bolster the presence of digital assets, let alone Dogecoin, on the social media platform.

Dogecoin’s rise does not mark the end of the crypto winter. October will likely disappoint crypto hopefuls looking for large advances in the start of the fourth quarter. This time last year, Bitcoin gained 40% and advanced 30% in 2020. This month, the largest digital asset is on track to gain less than 10%.

Year-to-date, Dogecoin has declined about 30%, while Bitcoin has plunged close to 55%. Memes and Musk aside, it will take more than a Dogecoin rally to pull digital assets out of the doldrums.

But the memecoin is a bright spot in the mostly muted digital asset space.

“It’s a good start,” said Quantum Economics founder and Chief Executive Officer Mati Greenspan. “But our problems are far from over.”