Chainalysis is excited to announce that we now cover the world’s premiere memecoin: Dogecoin. Once considered nothing more than a light-hearted joke, Dogecoin has become one of the world’s most popular crypto assets, thanks in part to cheerleaders like Elon Musk and other influential online figures.
As of August 9, 2021, Dogecoin has the fourth largest 30-day trading volume of all cryptocurrencies, with over $199 billion worth of transfers. Below, we’ll recap Dogecoin’s meteoric rise and tell you why our coverage of the asset is good news for the continued global adoption of digital assets.
What is Dogecoin?
The Dogecoin code is based on “Luckycoin,” a code fork of Litecoin (itself a Bitcoin code fork). This makes Dogecoin a great-grandchild of BTC code-wise. The similarities end there though. Bitcoin is designed to be a deflationary asset, with a hard limit of 21 million Bitcoin that will ever exist, and a mining reward that declines over time, halving approximately once every four years. Dogecoin, on the other hand, is an inflationary asset, with a faster block time — one minute versus ten minutes for Bitcoin, a static reward of 10,000 DOGE per block, and an eventual supply of 420 quadrillion tokens.
However, Dogecoin’s “memeability” appears to be the biggest driver of its recent explosive growth. People with large audiences, like Elon Musk and Mark Cuban, and online communities like Reddit’s r/wallstreetbets, have touted Dogecoin as a high-growth investment opportunity. As often seems to be the case in cryptocurrency, the hype became a self-fulfilling prophecy.
Dogecoin’s price rapidly rose from $0.005 on January 1, 2021 to an all-time high of $0.73 on May 8. Since then, the price has fallen, and now sits at $0.26.
Why Chainalysis’ DOGE coverage matters
Overall, Dogecoin is the 5th most traded cryptocurrency overall of 2021 thus far. However, its growing popularity has naturally led to increased usage of Dogecoin for criminal activity. We’ve seen several thefts and scams involving Dogecoin this year, including one giveaway scam that netted fraudsters over $40,000 after they promoted a bogus, Elon Musk-led initiative to pay users 10x back on any cryptocurrency sent to an address they provided, using hacked Twitter accounts to promote the scam following the Tesla CEO’s hosting appearance on Saturday Night Live. Dogecoin has also become popular in high-risk jurisdictions like Iran.
For those reasons, Dogecoin has become the most frequently requested new coin for Chainalysis to cover from our customers in both the public and private sectors. We’re excited to answer their calls today. If you’d like to learn more about Chainalysis’ coverage of Dogecoin and how it can help ensure your organization stays compliant, please contact us here.