According to the Financial Times, 2021 is a confusing time for financial markets with speculative bubbles falling from the sky. From a 1,500% price increase in video game retailer GameStop to Dogecoin’s 15,000% rise, the coin has been seen as a joke.
“Do you want Tesla to accept payments in Dogecoin?” is one of the billionaire Elon Musk’s posts on Twitter about the digital currency, thereby provoking the controversy and excitement of countless speculators.
Dogecoin, in theory, has many similarities with Bitcoin. This is also a digital currency recorded by a decentralized network of computers, not under the control of any party. They are also monitored for transactions via a digital ledger using Blockchain technology. However, instead of being praised for the countless arguments to raise the price like Bitcoin when it first launched, Dogecoin was only considered a joke.
However, while it is not supposed to “liberalize the financial system” or become a “global reserve currency” or change the world economy like Bitcoin, Dogecoin has since launched in December. 2013 is growing faster than the most popular digital currency globally.
While Bitcoin has only increased about 7,700% from 2013 to present, Dogecoin has had an astonishing 200,000% growth.
In other words, if you want to pour money into the most profitable investment channel in the past 7 and a half years, it is not Bitcoin, but Dogecoin is the right array of digital money.
But it is Dogecoin’s sharp rise in price, once seen as a joke, that is a slap for crypto players, who celebrate and value the Bitcoin or other crypto markets.
All the theories, the names that the player gives them turns out to be less than a Shiba Inu dog, the symbol of Dogecoin.
While crypto players embrace the idea that Bitcoin will replace traditional money one day, that we need to hold an asset in the digital age, that Bitcoin will resist inflation. Because the central banks, their real reason is just to try to push the price of this currency and drive new players to join.
According to the Financial Times, Bitcoin or many other cryptocurrencies today is no different from the multi-level market when the former participants have a huge incentive to pull the latter to pour money at any cost. Although getting rich from Bitcoin is the main goal and indeed this market has made many people become billionaires overnight, but this is not the only factor that causes many people to play cryptocurrencies.
It can be said that playing digital money today is no different than gambling and similar to when you go to Casino, people, apart from the desire to make money, are also satisfied with their entertainment. It is not surprising that the boom in the crypto market is accompanied by an outbreak of world epidemic and many people locked up at home, bored and without entertainment or money. So a form of gambling that can both solve sadness and bring a profit, or pile up debts with the name: “digital money”.
“The boring market phenomenon”
Bloomberg journalist Matt Levine once described this phenomenon as “Boredom Markets Hypothesis” when talking about the stock market.
Accordingly, many investors play stocks because they feel bored and want to find entertainment such as gambling. They want to enjoy the feeling of winning the money and the disappointment of losing capital, and then the blood rush as they continue to remove the gauze and fall into it.
The more engaging the stock market is, the more tedious everything else is and they continue to buy stocks. This is extremely common when the economy is in trouble, and the decline in other profit opportunities makes this boring market phenomenon even more widespread.
Going back to cryptocurrencies, this market is nothing more than a gamble and even easier than stepping into the casino. If in the US you will be bound to be able to play at the Casino, just a few clicks will be able to gamble with Bitcoin or any digital currency.
According to the Financial Times, the excitement of buying something affects how much people spend on them, and this is the case with Dogecoin.
In theory, digital currencies like Bitcoin should have been worth more when quantity was limited, around 21 million. Bitcoin’s popularity was also greater than that, but Dogecoin dealt a slap on major cryptocurrencies as they skyrocketed even though they could be mined indefinitely. In addition, the market does not have any constraints for the issuance of new digital currencies as there are currently nearly 10,000 cryptocurrencies traded.
Dogecoin’s success is similar to other digital currencies, according to the Financial Times. People buy in because it is interesting, they are discussed with their friends or fellow crypto players and can especially earn extra income during the season. But people should also stop taking this market seriously because we can do that with stocks.