350 Interactions, 6 today
Dogecoin’s price has risen more than 500% in the last ten days, giving it a $50 billion market cap, surpassing ING, Barclays, and Credit Agricole.
The last ten days have been nothing short of spectacular for Dogecoin (DOGE), which has risen by more than 500 percent to a new all-time high of $0.45. And after a 15% reversal, Dogecoin’s market capitalisation surpassed that of well-known financial companies such as ING, Barclays, and Credit Agricole.
Multiple tweets from Elon Musk, CEO of Tesla and SpaceX — and the world’s second-wealthiest human — boosted the meme-driven cryptocurrency. Musk is not the only billionaire investor who believes in cryptocurrencies.
Whether or not there are underlying reasons for the price increase, Dallas Mavericks owner Mark Cuban has openly defended DOGE. The Dallas Mavericks embrace it for merchandise sales as well.
Is Dogecoin worth more than Citigroup or Morgan Stanley?
Although the Dogecoin group is actively pushing for the $1 mark, many refuse to recognise that the existing 129.6 billion supply will increase by 20% in five years. Thus, $1 per 1 DOGE will result in a market capitalisation of $156 billion, or twice the existing value of Binance Coin (BNB).
To demonstrate how absurd the initial $1 goal is, there are actually 92 tradable assets with a market value greater than $156 billion. Citigroup, Morgan Stanley, Unilever, and Shell all have $150 billion market capitalizations and, as a result, will rank lower than Dogecoin if its fandom continues to lift its valuation past $1.
It is worth noting that institutional investors will open short positions in those assets and gamble on a price drop, while Dogecoin futures are not available to traders in the United States. Since it is not listed on the CME or the Bakkt, experienced traders cannot bet against DOGE.
Inefficiencies will fade as markets evolve
If the cryptocurrency industry matures, institutional-focused exchanges may begin to sell altcoin futures, resulting in a more competitive market. Meanwhile, contrasting Dogecoin’s market capitalisation to those of more developed banks yields skewed results.
While some argue that new rules are needed to prevent these inefficiencies, it is important to note that Gamestop shares increased by more than 860 percent in January.
Despite the fact that Gamestop has been unable to make a profit for the past six years, the sheer frenzy created by social network-coordinated investment has driven its market capitalisation beyond $24 billion, which is higher than the National Bank of Canada.
In principle, no intelligent investor will deliberately prefer Gamestop over a bank that regularly produces earnings in excess of $2 billion Canadian dollars every year. Nonetheless, sector inefficiencies can result in temporary distortions.
Similarly, while Dogecoin investors can make history by hitting $1, this value is unlikely to last as retail traders gain access to shorting instruments.