Dogecoin Price Soars, Bitcoin Still Can’t Recover

Dogecoin price surged after Tesla CEO Elon Musk tweeted that the coin can be used to buy some Tesla products.

According to the data of CoinMarketCap On January 14 (Vietnam time), the price of Dogecoin skyrocketed 17.01% compared to the previous 24 hours to 0,19 USD. In the last 24 hours, the price has reached a milestone 0,2 USD.

The total market capitalization of the coin is close to 26 billion USD. But compared to the top 0,73 USD established 8 months ago, the price of Dogecoin is still down more than 73%

DOGECOIN PRICE INCREDIBLE

According to Tesla’s website, products like a horn shaped like a Cybertruck can be purchased with Dogecoin – a cryptocurrency that was born as a joke.

On January 14, Dogecoin founder Billy Markus also posted on Twitter an image showing the Cybertruck horn product listed for 300 Dogecoin.

In fact, the electric scooter company planned to accept payments in Dogecoin.

Last year, Dogecoin – a digital token created in 2013 by a pair of software engineers – witnessed a crazy price increase. The currency increased sharply after many times receiving the support of Elon Musk. Musk even thinks this memecoin is more interesting than Bitcoin and other cryptocurrencies.

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The price of Dogecoin skyrocketed after the news that Tesla accepted payment in this currency. Photo: CoinMarketCap.

Last year, the billionaire tweeted that he was working with Dogecoin developers “to improve the efficiency of transactions on the system”. The announcement pushed the price of the coin to skyrocket in just a few minutes.

This is not the first time Tesla has accepted cryptocurrency payments. Early last year, the electric car company bought 1.5 billion USD Bitcoin and the announcement to accept payment in this currency.

Tesla’s announcement sent the coin’s price skyrocketing and set a record at the time. But then Musk said he was temporarily suspending Bitcoin payments due to environmental concerns.

Analyst Sean Williams said:

Elon Musk’s support for Dogecoin is no longer credible. I think a Dogecoin bubble burst is completely predictable.

According to an analysis by TRG Datacenter, Dogecoin uses significantly less energy. However, according to analyst Sean Williams, Musk once turned away from Bitcoin. “Therefore, his support for Dogecoin is no longer credible,” Mr. Williams emphasized.

“I think a Dogecoin bubble burst is completely predictable,” emphasized the expert. Experts also say that there is an endless supply of new cryptocurrencies. Blockchain projects are introduced regularly. Therefore, the lack of competitive advantage makes Dogecoin easily removed from the game.

In addition, one of the core purposes of cryptocurrency is to ensure decentralization, i.e. no large entity exerts significant control over Dogecoin. However, Dogecoin failed to do this.

According to BitInfoCharts, out of a total of more than 3 million addresses owning Dogecoin worth at least 1 USD, only 95 addresses control 66.01% of all tokens in circulation. When these “whales” sell off, the price of the currency will plummet.

BITCOIN DELICIOUS RECOVERY

Meanwhile, Bitcoin price is still struggling to regain momentum. On January 14, the world’s largest cryptocurrency traded around the threshold of 43.000 USD, down 0.64% from the previous 24 hours.

Compared to the near peak 69.000 USD was established on November 10, 2021, the Bitcoin price has dropped by 37.5%.

On January 13, Bitcoin price rebounded somewhat after the news of record inflation in the US. “Report on record US inflation triggered a sell-off in the dollar. This helps Bitcoin benefit,” explains financial expert Edward Moya at consulting firm Oanda (based in the US).

The risk of a dollar devaluation could help Bitcoin – the asset considered “digital gold” – return to the upside.

“Bitcoin price has yet to regain momentum, although some advocates refer to Bitcoin as ‘digital gold. Cryptocurrencies still seem like a risky asset,” commented Craig Erlam (London-based) financial expert.

According to him, the currency remains under pressure as interest rate concerns spread across the market. At the December 14-15, 2021 monetary policy meeting of the US Federal Reserve (Fed), some officials believed it was time to narrow the portfolio. 8.8 trillion USD, including bonds and other assets.

These officials said that the shrinking of the balance sheet should be implemented soon after the Fed starts raising interest rates. Minutes of the meeting emphasized that interest rates should “be raised earlier than previously planned”.

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