Dogecoin soared on Friday but the cryptocurrency’s circulation ownership raises questions. Ether pops as its futures market hits a record. Bitcoin faces pressures from its options market and a downward trending dominance percentage.
- Dogecoin (DOGE) trading around $0.56 as of 21:00 UTC (4 p.m. ET). Gaining 47% over the previous 24 hours.
- Dogecoin’s 24-hour range: $0.39-$0.58 (CoinDesk 20)
- Bitcoin (BTC) trading around $50,263 as of 21:00 UTC (4 p.m. ET). Gaining 3.2% over the previous 24 hours.
- Bitcoin’s 24-hour range: $49,009-$51,502 (CoinDesk 20)
- Ether (ETH) trading around $4,055 as of 21:00 UTC (4 p.m. ET). Gaining 10.6% over the previous 24 hours.
- Ether’s 24-hour range: $3,641-$4,165 (CoinDesk 20)
Dogecoin correlation to BTC near zero as asset pumps
Meme-friendly cryptocurrency dogecoin bounced back in a big way Friday, up 47% as of press time. The expectation that Coinbase would list and begin trading the asset in the near future was likely one culprit for the FOMO. So far in 2021, dogecoin is up over 12,000% on Binance, according to data provided by charting software provider TradingView.
Not all industry participants are amused by dogecoin’s tricks, however.
“Being something of a crypto old-schooler I am really troubled by the comical approach taken to dogecoin,” said over-the-counter bitcoin trader Henrik Kugelberg. “As if it’s somehow not actual people’s money being the victim of extremely rich peoples’ whims and fooling around.”
Interesting to note from Kugelberg is the sheer concentration of wealth in the dogecoin ecosystem. According to blockchain data from Bitinfocharts, one person owns 28.8% of all doge in circulation, and just 102 wallet holders own another 38.5%. So 67% of all dogecoin is effectively controlled via 103 wallets.
“I am staying far from DOGE,” added Kugelberg.
What may be of interest to larger holders, however, is that dogecoin does not move in tandem with bitcoin. At least not anymore. According to CoinDesk Research, dogecoin’s correlation with bitcoin has fallen to near zero, which means the two cryptocurrencies are both marching to the beat of their own drums, at least since October 2020 when the two were closely correlated.
“At this point the financial future of doge could very much be dictated by Elon [Musk, the Tesla CEO] and others who unilaterally decide to adopt it as their currency of choice,” said John Willock, chief executive officer of crypto custody provider Tritum. “That decision is likely not to be based on merit of the traditional sort but, rather, just because they like it.”
“As far as our portfolio, we aren’t specifically long dogecoin but may trade its volatility in a delta-neutral manner if it suits us,” Willock added.