Wow, much bubble: Dogecoin's market cap just shot past $2bn

 
Lynsey Barber
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Dogecoin is based on a dog meme from 2013 (Source: Getty)

The market cap of a joke cryptocurrency has doubled in less than a week, shooting past the $2bn mark in the latest sign of the craziness of the crypto world.

Dogecoin, based on a Shiba Inu dog internet meme which first emerged in 2013, had already hit the headlines last week when it passed the $1bn mark.

The value of Dogecoin has increased more than 6,000 per cent in the past year.

Read more: The secret creator of bitcoin is now one of the world's richest people

The rise and rise of bitcoin over the past year has spread to other cryptocurrencies - joke or not - with Ripple also starting the year on a high as it overtook ethereum as the second biggest cryptocurrency in the world by market cap.

JP Morgan noted that bitcoin's share of the cryptocurrency market - around a third - is at a new low, while the total value of the market is at a new high of $770bn.

"Other cryptocurrencies have likely benefited from the increased interest in bitcoin amid the listing of exchange traded futures, as well as the sharp rise in bitcoin average transaction costs from around $6 per transaction in early December to nearly $60 per transaction on Dec 22, before settling in a $25-$30 range in recent days," said analyst from the investment bank in a note on Monday morning.

"By contrast, average transaction fees in ethereum reached a high of $1.50 in early December and were around $1 on Jan 4, while average transaction fees in ripple measure a few cents according to bitinfocharts.com."

The creator of Dogecoin, Jackson Palmer, has not cashed in like other early adopters. He told the podcast Coloring Crypto on Sunday that he did not invest until 2017 and tweeted that he has not held "a substantial amount" of Dogecoin since 2015.

Based on estimated holdings, the anonymous creator of bitcoin became a billionaire on paper on the back of the boom.

Commenting on Dogecoin's rise, he said it was a barometer for "crypto-mania and speculation" and that the current market is a bubble.

"I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over two year has a $1bn plus market cap," he said.

Read more: Bitcoin futures investors set to suffer losses

Palmer said that cryptocurrencies are more like stocks than currency, a trend that is likely to continue.

"I think 2018 will be a year that cryptocurrency in its current form at least is finally written off as a currency, or a means of exchange. I think It's going to be cemented as akin to stocks, or digital stocks in technology," he said.

Dogecoin is now among the world's 30 most valuable cyptocurrencies according to coinmarketcap.com.

Meanwhile, the price of bitcoin fell below $15,000 and Ripple pared gains to $2.46, down from an all-time high of $3.84 last week

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