Bitcoin Falls for 5 Consecutive Days... Dogecoin Surges Over 300%
Even Cryptocurrency Advocates Warn of a Bubble... Possibility of Further Correction Raised
[Asia Economy Reporter Gong Byung-sun] Concerns about a bubble have begun to grow as Dogecoin, a cryptocurrency considered to have no value, soared on a single comment by Elon Musk, CEO of Tesla. This caused the entire cryptocurrency market to shake and plummet.
According to the domestic cryptocurrency exchange Upbit on the 19th, as of 6:30 a.m., the representative cryptocurrency Bitcoin recorded 74.62 million KRW, down about 4.2% from the previous day. It had surpassed 80 million KRW riding an upward trend as recently as the 13th, but has been falling for five consecutive days since then, moving away from 80 million KRW.
The decline in altcoins, which had recently shown a rapid rise, is even more severe. Most showed a drop in the double digits percentage-wise. For example, Metadium, which was around 30 KRW at the beginning of last month and rose to 466 KRW at the beginning of this month, fell to 234 KRW during the same period, cutting its value in half.
On the other hand, Dogecoin is running alone. As of the same time, Dogecoin recorded 457 KRW, up 25.14% from the previous day. Expanding the range to one week, it shows an outstanding increase rate of 368.55%. Following Dogecoin, the cryptocurrency with the second-largest increase over the week was Ethereum Classic, which recorded 104.73%, showing a difference of more than three times in growth rate.
Dogecoin is a cryptocurrency created as a joke in 2013 by developers including Billy Markus and Jackson Palmer. Since 2019, there has been no development work, so it has no technical value, and its issuance is unlimited. Nevertheless, the surge was due to a single comment by CEO Musk. On the 15th (local time), when he mentioned Dogecoin on Twitter, cryptocurrency investors began flocking to Dogecoin. Domestic investors also started buying Dogecoin, with about 8 trillion KRW in trading volume concentrated on Upbit alone as of the same time.
As even cryptocurrency advocates expressed concerns about the bubble, the cryptocurrency market began to shake. On the 16th, Mike Novogratz, CEO of cryptocurrency investment firm Galaxy Digital, pointed out in an interview with the U.S. economic media Bloomberg, "Buying Dogecoin is equivalent to purposeless investment," and added, "It reminds me of the GameStop incident where individual investors irrationally flocked to counter institutional short selling." Novogratz is a leading cryptocurrency advocate who earlier this month predicted that Bitcoin's market capitalization would surpass gold.
Experts warned that a larger correction could come. Since the cryptocurrency market surged around the Nasdaq listing of Coinbase, the largest U.S. cryptocurrency exchange, there is a possibility of a sharp decline. Hwang Se-woon, a researcher at the Korea Capital Market Institute, said, "The cryptocurrency market surged even though it has not yet gained full trust," and added, "Additional adjustments are expected to occur until it settles within the institutional framework."
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