Dogecoin began to see significant gains in value on Jan. 27 due to social media groups that shorted the cryptocurrency. As a result of that activity, Dogecoin’s price has gained about 580% over the past month.
The dog-themed cryptocurrency’s most recent 37% surge, however, appears to be tied to attention generated by various celebrities.
Elon Musk of Tesla and SpaceX fame was among the first to draw attention to Dogecoin. He filled his Twitter feed with numerous tweets about Dogecoin, including a photoshopped magazine cover that reads “Dogue”—a play on the title of the popular fashion magazine Vogue.
Other celebrities also promoted Dogecoin. Rapper Snoop Dog shared one of his own album covers with the words “Snoop Doge” over the original.
Elsewhere, KISS frontman Gene Simmons endorsed the coin. He stated that he “bought even more Dogecoin” and that he “believes it will go up.” Simmons commented on the coin’s price surge over the course of the day.
Is Dogecoin a Legitimate Investment?
Dogecoin was originally conceived as a joke cryptocurrency in 2013. But because the coin is based on Bitcoin and Litecoin, it functions as a real cryptocurrency. Some merchants even accept it as payment.
However, this month’s growth appears to be driven by hype combined with mass short selling rather than real innovation or adoption.
As such, the price surges seen recently are unlikely to become permanent, making DOGE a questionable long-term investment. Still, profits are clearly possible for those who time their trades correctly.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.