Dogecoin soared above 69 cents on Wednesday—not bad, after starting the year at less than a penny. It fell back a bit, but it’s now worth some $81 billion. Launched as a joke in 2013, Dogecoin, unlike Bitcoin, has no supply cap, so it’s no inflation hedge. And while a few online retailers accept Dogecoin, it lacks Bitcoin’s mainstream appeal.
What Dogecoin has is a big community—probably in the millions. Trading it has triggered outages on platforms like Robinhood. Its community rallies around observances like Doge Day, on April 20 (a holiday for pot fans, too), and some attribute gains to Elon Musk going on Saturday Night Live. “The social aspect of crypto is meaningful,” writes Matt Hougan, chief investment officer of Bitwise Asset Management, in an email to Barron’s. “[It’s] the first money native to the internet, and it’s not surprising that some of the common features of the internet are part of its story, including online communities, viral growth, etc.”
Online communities can form the basis of new markets. Investors who came of age before the internet may view online “assets” as worthless. Those who grew up spending real money to buy a videogame sword are more comfortable with it.
But even Hougan sees Dogecoin as an example of market excess. Bitwise has an index that tracks the 10 most valuable cryptocurrencies by market cap. Dogecoin ranks fourth, but it isn’t in the index. Bitwise has rules that screen out assets that aren’t appropriate for institutional investors, he says, and Dogecoin fails to meet a number of them. Musk may be ready for late-night, but Dogecoin isn’t quite ready for prime time.
Stocks rose despite weaker-than-expected manufacturing data, then fell as tech sank on comments by Treasury Secretary Janet Yellen that rising rates might cool off an overheating economy, which she walked back. The Dow industrials set its 22nd and 23rd records of 2021. Jobless claims fell to a pandemic low, but new job creation proved anemic. On the week, the Dow rose 2.66%, to 34,777.43; the S&P 500 was up 1.23%, to 4232.60; and the Nasdaq fell 1.51%, to 13752.24.
Still Banned From
Facebook’s 20-person oversight board upheld the banning of former President Trump after the Capitol insurrection in January, but gave the company six months to make a final decision and explain its reasoning.