After the last economic turmoil between Gamestop, Wall Street, and hedge funds, something similar has occurred. This time it’s a cryptocurrency, and more specifically, Dogecoin.
In late January, the hysteria was all over the news about individual Reddit website users under the “r/Wallstreetbets” forum who started holding shares of Gamestop stock against shorting Hedge funds that caused the company’s stock to increase dramatically. These Hedge funds were basically partnered investors betting that Gamestop would go out of business, but since these subredditors turned the odds of Gamestop’s future, those professional investors resulted in great financial losses.
Leading back to Dogecoin, this cryptocurrency situation is similar to that of Gamestop’s hysteria because they both have the intent to one: troll around, and two: to get back at those bigger and powerful investors at WallStreet.
It all started in 2013 when Dogecoin had actually been created into the decentralized and unregulated digital world of cryptocurrency as a meme. Now, it has attracted attention once again thanks to social media platforms such as Reddit and Twitter. So it is no surprise when famous people such as Elon Musk, CEO of SpaceX, start tweeting things like “Dogecoin is the people’s crypto” and “No highs, no lows, only Doge” that really get people to join the bandwagon.
“I’ve heard multiple things about it from Twitter and at first I thought it was a meme since most of the stuff that was posted was a joke. But when Reddit users started investing into Gamestop and others to combat Wall Street investors, it seemed like a pretty good idea to invest into Dogecoin since many are doing it and pulling out when it’s reaching its peak,” said senior Ian Reyes.
Now, it is easier to access the cryptocurrency world thanks to the knowledge of the internet and drive to explore the world of digital economics.
“The reason Dogecoin blew up is because people love memes and it’s a more accessible version of bitcoin,” commented senior Rachel De Haro.
Additionally, it has become such a popular topic to discuss that it has created its own slogan now. “Dogecoin to the moon,” reiterated senior Juliza Bonilla when asked about the cryptocurrency.
To sum it up, the more popularity it gains, the more and more people will start to invest in Dogecoin and raise its value. From an economic standpoint, what this means is that as demand increases, so does the price of Dogecoin. Though, there are some pros and cons to investing in things like Dogecoin. Much like stocks, there is a chance individuals could lose or gain a considerable amount of money.
“There is so much volatility, you don’t know what’s going to happen, it’s a big risk and you see that volatility happens with a lot of crypto including Bitcoin which is obviously bigger one than Dogecoin,” said AP Macroeconomics teacher, Mr. Ryan Peronto.
Investing considers the time to truly inform one’s self about cryptocurrency or stocks. Otherwise, the consequences outweigh the winnings.
“With any type of investment, you’re going to see a tradeoff between risk and reward. Generally, the higher the potential payoff there is for an investment, the risker it’s going to be. And the safer investment you’re going to earn less money,” added Peronto.
Overall, it’s up to individual choice and how much people are willing to bargain for. Whether it’s getting back at wealthy investors, Tweeting about it like Elon Musk, or just for the memes, being informed before becoming involved could save time and money. In better words, mass hysteria does not tell the whole story.