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LONDON – Dogecoin skyrocketed on Wednesday after receiving some celebrities on Twitter.
According to Coin Metrics, the price of Dogecoin has increased 20% to 32 cents in the past 24 hours. The meme-inspired cryptocurrency hit a record high of over 45 cents earlier this month, sparking fears of a possible bubble in the crypto market.
Originally started as a joke in 2013, Dogecoin is now the sixth largest digital coin, with a total market value of nearly $ 42 billion, according to CoinGecko. It takes its name and branding from the “Doge” meme, which depicts a Shiba Inu dog alongside nonsensical phrases in multicolored text.
The price has often gone up after tweets from Elon Musk. Billionaire Tesla CEO once called Dogecoin his “favorite” cryptocurrency and “the people’s crypto”. Musk is also a proponent of Bitcoin, as his electric car company has amassed nearly $ 2.5 billion in cryptocurrency.
On Wednesday, Musk simply tweeted, “The Dogefather SNL May 8th.” This is a reference to both his frequent tweets about Dogecoin – which he claims are “just jokes” – and Musk’s scheduled appearance on Saturday Night Live next week.
But Musk wasn’t the only one tweeting about Dogecoin. Mark Cuban, the owner of the Dallas Mavericks basketball team, made several posts about the meme-based token this week. On Monday, the billionaire entrepreneur and TV personality said his NBA team was on track to finalize 6,000 Dogecoin transactions in April.
“Doge is the only coin people actually use for transactions,” Cuban said when asked by a user why he supports Dogecoin. “People are spending their doge and that means more companies are going to start.”
Dogecoin has gained a huge following among retailers with the stock trading app Robinhood, which also has a crypto function. Fans of the token have asked Robinhood to introduce a feature that will allow them to withdraw their holdings of various cryptocurrencies. On Tuesday, Robinhood co-CEO Vlad Tenev said the company was working on such a role.
“We are working on deposits and withdrawals!” Tenev tweeted. “Not just for DOGE, but for all of the coins on Robinhood Crypto.”
However, Dogecoin’s wild surge has sparked warnings from some investors viewing this as a speculative bubble. The digital currency is “a classic example of a larger fool theory,” David Kimberley, an analyst with UK investment app Freetrade, told CNBC earlier this month.
“People don’t buy cryptocurrency because they believe it has significant value, but rather because they hope that others can pile up, drive up the price, and then sell it and make money quickly,” said Kimberley.
But he added, “If everyone does this, eventually the bubble has to burst and you will be shorted out if you don’t get out in time. And it’s almost impossible to tell when that will happen.”
There are economists who still view Bitcoin as a bubble, despite claims by bulls that the digital currency market has matured significantly over the past three years. Unlike Bitcoin, however, Dogecoin does not have a fixed supply cap, which theoretically means that an unlimited amount can be minted.
Disclosure: “Saturday Night Live” is a television show hosted by NBCUniversal, the parent company of CNBC.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” in which Mark Cuban is a panelist.