Dogecoin’s price plunged on Wednesday morning, a day after fans tried to push it to $1 as they celebrated ‘Dogeday’.
Dogecoin (DOGE-USD) was down 22% to $0.3248 (£0.23) on Wednesday morning in London. On Tuesday, it had hit $0.4252 and its market capitalization crossed $50bn as supporters tried to push the price to between $0.69 to $1.
The surge coincided with a flurry of social media attention around what fans of the cryptocurrency called ‘dogeday’ — a day of celebration dedicated to the meme cryptocurrency that coincided with the unofficial marijuana holiday 420.
Capital.com, a retail trading platform, said on Tuesday dogecoin has been its most popular cryptocurrency since 14 April. Other platforms have reported similar spikes in interest.
Sebastien Galy, a strategist at Nordea, said: “Beanie baby fervor has reached the crypto space with Dogecoins.”
Experts have urged caution when it comes to dogecoin, which was originally created as a joke.
“Investors should be extremely cautious about getting caught up in this herd mentality because dogecoin is very much a speculative bet whose valuation has no reliable basis,” said Susanna Street, senior investment and markets analyst at stockbroker Hargreaves Lansdown.
“Demand has come from traders trying to ‘game’ the system and others hoping to benefit from future price rises rather than use the coins as a means of exchange.
“Predicting the point at which demand subsides and prices begin to fall is very difficult, if not impossible and people risk getting their fingers seriously burnt.”
Elsewhere on Wednesday, bitcoin (BTC-USD) ticked higher and ethereum rallied. Bitcoin was up 1.4% to trade at $55,638.3. Ethereum (ETH-USD), the second largest cryptocurrency, was down around 9% to trade at $2,302.3.
Both cryptocurrencies have come under selling pressure in the wake of Coinbase’s (COIN) hotly anticipated IPO but they pared some losses as they continue to get attention from mainstream companies.
Venmo, owned by PayPal (PYPL), this week announced that its 70 million customers could buy bitcoin, ethereum, litecoin and bitcoin cash for as little as $1.