Dogecoin is now the fourth largest cryptocurrency in market value, according to CoinMarketCap data.
An uptick of 14 billion since the beginning of the year has taken the meme-inspired cryptocurrency to a market of more than $85 billion, eclipsing Ripple’s market of around $71 billion.
The recent increase in dogecoin came on Tuesday, when the cryptocurrency jumped more than 60%, probably in anticipation of Elon Musk’s SNL debut this weekend, according to an analyst, as Musk has long been a supporter of the cryptocurrency and called it “people’s cryptography. “
The increase in cryptocurrencies accelerated in 2021, with Bitcoin rising more than 80% since the beginning of the year and Ethereum more than 300%. Many investors offering virtual currencies see it as inflation-opposing coverage, as the Fed prints cash. and Congress spends cash to stimulate an economic recovery after the COVID-19 pandemic.
But not everyone accepts this coverage as opposed to the inflation argument. Bank of America analysts argued that the only explanation for why buying cryptocurrencies is worth it, not diversification or hedging.
“Looking year after year, we find that Bitcoin has definitively correlated with CPI inflation in five of the last nine years, with the largest correlations in 2014 and 2018 Array . . . that Bitcoin has one of the lowest co-movements, lagging behind in the maximum categories of assets such as commodities, TIPS and FX EM in particular,” BofA said.
Investors may not buy dogecoin as inflation coverage because it does not have a constant supply, but is an inflationary piece, with five billion new dogecoins entering the market a year, giving credit to the concept that investors are providing more dogecoin to investors. joke or speculate about a new appreciation of value.
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