A visual representation of the digital cryptocurrencies Dogecoin and Bitcoin.
Yuriko Nakao | Getty Images News | fake images
Dogecoin, the original meme asset, jumped on Wednesday following Coinbase’s announcement that it will begin listing the cryptocurrency on its Pro platform this week.
Dogecoin is trading at about 42 cents on Wednesday morning, which is a 25% increase on the day, according to Coin Metrics. The move earned it a market capitalization of $ 54 billion, making it the sixth-largest cryptocurrency by market value, according to Coinbase.
The cryptocurrency is based on the internet doge meme of 2013 and was jokingly created the same year, when the enthusiastic but niche bitcoin community began to strengthen around its pseudonymous creator, Satoshi Nakamoto.
However, it has gained some prominence this year, following continued endorsement and hype on social media by Tesla CEO Elon Musk, who has become something of a driver of the cryptocurrency market with his tweets about dogecoin and bitcoin. In early May, Musk’s posts propelled the dogecoin rally to its all-time high of 67 cents, according to Coin Metrics. His appearance on SNL, in which he called dogecoin “a hustle”, caused the price to plummet just as easily.
Trading on Coinbase Pro will begin Thursday at 12pm ET.
Coinbase Pro is the exchange’s professional-level trading platform for active traders. Coinbase does not currently support dogecoin on its retail trading platform. Historically, the speculative joke coin has been unpromising as a useful blockchain project and has had few technology updates, making it especially risky for hobbyist retail investors, who have been the main drivers of price rallies for different cryptocurrencies. , including dogecoin.
Coinbase is the largest cryptocurrency exchange in the US, with 56 million verified users and $ 223 billion in assets across its platform. Historically, when you include a new asset, its price tends to rise on the first day of trading (like an IPO). This is a well-known phenomenon known as The Coinbase Effect. Pre-listing announcements alone have had a similar effect on asset prices.
The listing process is likely to be thorough and rigorous, especially now that Coinbase is a public company. His decision to include dogecoin could be seen as a litmus test for other individual assets, particularly as cryptocurrency newcomers and different metrics have emerged, such as tweets from big business figures.
“What we’re seeing with social media is the capacity of a small part of the overall mosaic of move markets,” former SEC Chairman Jay Clayton told CNBC’s “Squawk Box” on Wednesday when asked. asked about Musk’s tweets.
“As a person who watches the markets, that worries me,” he said. “What constitutes a good investment is never just one piece of the mosaic. Taking one of those pieces and amplifying it without updating the rest of the image is not something that should be encouraged ”.
