Meme coin mania certainly doesn’t appear to be over quite yet, with the world’s largest dog-inspired crypto Dogecoin (CRYPTO: DOGE) making two-year highs in yesterday’s session. Dogecoin surged above the $0.22 level before giving up most of yesterday’s rally in today’s session, with the meme token down 1.7% over the past 24 hours after this volatile price action, as of 12:15 p.m. ET.
Dogecoin has seen significant momentum in recent trading sessions due in part to enthusiasm over potential integrations with X Payments, as per previous comments from X CEO Elon Musk. Additionally, investors are gearing up for a new Dogecoin-related initial-exchange offering, with Dogecoin20 set to hit exchanges on so-called “Doge Day,” which is affectionately (and humorously) set for April 20.
Finally, Dogecoin’s significant weekly move appears to be also tied to anticipation around Dogecoin futures products set to be launched on Coinbase (NASDAQ: COIN) in short order, which should improve the token’s liquidity in the market and the ability for investors to speculate on future price movements.
Let’s dive into whether these catalysts make the world’s largest meme coin a buy at current levels.
This meme coin launch matters
The fact that Dogecoin’s status as the leading meme token has led to what looks to be a well-subscribed spin-off for another Dogecoin-related meme token certainly shouldn’t surprise anyone. Dogecoin20 will hit exchanges via what’s known as an initial-exchange offering, or IEO. This differs from an initial-coin offering in that a crypto exchange will oversee the token sale, requiring a vetting process to ensure that investors know what’s at stake via the project’s white paper and adding to the publicity of such launches.
Dogecoin20 will be an Ethereum– (CRYPTO: ETH) based project, allowing investors to earn relatively high staking yields to help secure the network and process transactions. Current demand for this launch appears to be strong, with Dogecoin seeing some corresponding buying pressure as a result. This token will have a capped supply and could advance some utility-generating use cases many have called for as necessary for Dogecoin to go to the next level.
Momentum remains strong with this token
The fact that Dogecoin is up around 20% over the past week in advance of this launch is noteworthy. As a speculative asset viewed as a higher-risk way to play momentum in the cryptocurrency market, Dogecoin will likely continue to see higher-beta moves, or move in greater correlation (to the upside and downside) to the overall crypto market. If the market is on the rise, investors will look to Dogecoin and other higher-risk assets to capture the move and will now have the ability to use futures contracts to do so. At least, that’s what’s driven much of this token’s outsized volatility in the past.
So long as momentum remains strong for this token, it really doesn’t matter that there’s little underlying utility provided to end users. And while the Dogecoin team appears to be working to fix that reality, it’s going to remain primarily an asset that speculators and gamblers use to trade animal spirits. Right now, animal spirits are high in this space, so it’s party on for Dogecoin holders.
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Chris MacDonald has positions in Ethereum. The Motley Fool has positions in and recommends Coinbase Global and Ethereum. The Motley Fool has a disclosure policy.
Dogecoin Rips to 2-Year High Then Slips Today. Here’s What to Make of This Recent Move was originally published by The Motley Fool