Dogecoin price slump continues after Doge co-founder slams cryptocurrencies as 'scam' and China clamps down on crypto mining
After China’s crackdown on cryptocurrency mining saw major drops in Dogecoin, Bitcoin and Ethereum and crypto prices across the board in late June, Dogecoin has struggled to return to its previous heights of success.
Dogecoin prices have continued to trend downwards since reaching their most recent peak last month on June 25, when the memecoin appeared to bounce back after the cryptocurrency market was hit hard by the Chinese Government’s pledge to clamp down on the country’s huge crypto mining operations.
The announcement from China’s state authority in June saw prices of all major crypto coins tumble across the board – with Bitcoin fans and investors fearing for the worst when the world’s most popular cryptocurrency crashed and dipped below $30,000 in value.
Particularly, usual trading trends of ‘hodling’ (refusing to sell or exchange cryptocurrency when prices plummet) and ‘buying the dip’ seemed to be under greater strain as the continuing Chinese crackdown brings even more volatility for the market, which can be expected for some time.
While Bitcoin’s price had rallied since the initial crash and continues to be inflated by the enthusiasm of investors, fears over whether it can climb above the mid $30k bracket and for the value of Dogecoin remains.
Doge’s growth has slowed considerably since the sweeping crash occurred last month.
But it has also been hampered by the arrival of new alt coins on the scene like ‘Baby Doge’ and more recently, biting criticism about cryptocurrency from Dogecoin co-founder Jackson Palmer.
Here’s what Dogecoin is, what it’s currently worth and why it’s struggling right now.
What is Dogecoin?
Much like Bitcoin, Dogecoin is an open-source cryptocurrency which can be traded and exchanged across decentralised peer to peer networks between users, with tokens of value reaped as rewards for users operating in lieu of banks or governments to ensure the validity of its transactions.
Paying tribute to the shiba inu ‘doge’ meme circulated far and wide across the internet for years, Dogecoin was created in 2013 as a satirical take on the booming popularity around more traditional coins like Bitcoin and their cult following.
But the coin has come full circle, with it now being taken just as seriously as its crypto competitors after its visibility increased worldwide over recent years.
The irreverent tech billionaire earlier this year sent the crypto market into a tailspin when he announced that Tesla would be suspending Bitcoin payments for its vehicles due to the currency’s considerable environmental impact, and has routinely mocked Bitcoin while praising Dogecoin online and inflating the price of the memecoin.
How much is it worth today?
Dogecoin’s price has remained low since most recently peaking at a price of $0.263864 on 30 June, according to CoinDesk.
This was a huge drop from its peak in early May, when the coin’s rapid rise saw it reach a peak of $.0722320 on May 8.
Today (July 20), its value has been fluctuating between $0.165747 and $0.176505 – with the coin’s price continuing to dip between one and five percent on the last 24 hours, seeing it reach a 24 hour low of $0.160001 at the time of writing.
This follows the emergence of a new alt coin competitor which eclipsed Dogecoin’s rising success, with ‘Baby Doge’ arriving on the market as the younger sibling of the resident memecoin and already emerging as Elon Musk’s new favourite coin – continuing a pattern of new variants, like Shiba Inu coin, on Dogecoin.
The initial hype around Baby Doge appears to have died down, however, with the coin reportedly showing a 40% fall in value this week.
But Dogecoin’s continued price fall has seen fans and investors alike fear for the long-term success of the cryptocurrency.
Who is Jackson Palmer and what did he say about crypto?
Unlike his former partner and fellow co-founder Billy Markus, who recently said he invested in Dogecoin for the first time ever to help it recover from June’s crash, Jackson Palmer has shown deep scepticism toward cryptocurrency.
The software engineer teamed up with Markus in 2013 to create Dogecoin as a joke, poking fun at the cult-like fascination with Bitcoin as it soared in visibility and value in the 2010s.
But despite his original intention to use Dogecoin as a means of encouraging greater innovation in the cryptocurrency arena, Palmer announced he would be taking an extended leave of absence from the crypto world in 2015 and criticised its considerably wealthy, white and male composition.
On Wednesday (July 14), Palmer, in a rare reappearance on Twitter, revived such criticisms of the sector.
In a series of tweets, Palmer said that he had no plans to return to cryptocurrency, calling it “an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.”
He continued: “The cryptocurrency industry leverages a network of shady business connections, bought influencers and pay-for-play media outlets to perpetuate a cult-like “get rich quick” funnel designed to extract new money from the financially desperate and naive.
“Financial exploitation undoubtedly existed before cryptocurrency, but cryptocurrency is almost purpose built to make the funnel of profiteering more efficient for those at the top and less safeguarded for the vulnerable.”
Palmer’s criticism has sparked a backlash from many within the crypto community who believe it can offer a powerful alternative to traditional financial systems and banking.
Nick Saponaro, co-founder and CIO of the Divi Project, a decentralised payment ecosystem aiming to ‘accelerate the adoption of digital currencies’, is one such figure who takes issue with Palmer’s critique of cryptocurrency as a system controlled by a select group of wealthy and elite individuals.
“All markets are manipulated to some degree,” he said.
“I would argue that crypto is one of the least, especially when considering the stock market manipulation by actors that hold inordinate amounts of power.
"How about the world’s largest companies, like Amazon, effectively paying $0 in taxes? I would argue that the traditional finance system has been co-opted by the elites to benefit their bottom line far more than cryptocurrency has.”
Saponaro continued: "There are so many beautiful outcomes as a result of the technology being built by the developers and business people in this space that are completely ignored by [Palmer’s] argument.
"We've seen lives changed, families fed, businesses built, and freedom captured by participating in crypto.”
What’s next for Dogecoin? How are Ethereum and Bitcoin doing?
Dogecoin price predictions following this continued tumble have seemingly put hopes of the coin finally reaching $1 worth or above anytime soon slightly further out of reach.
The closest the cryptocurrency came to nearing that landmark threshold was seen in early May, before China’s latest moves to stunt the flow of transactions and mining began to shake the market, with this latest bout of volatility adding to rising fears over the long term health and sustainability of the crypto market and whether there’s more instability to come.
Bitcoin and Ethereum, the currency dominantly associated with the controversial tech trend of NFTs, have likewise seen greater fluctuations and dips in price since news of a crackdown in China sent shockwaves across the market.
Ethereum has struggled to maintain values above its $2000 benchmark, while Bitcoin has similarly remained stuck in the low to mid $30k bracket.
Both major cryptocurrencies took a tumble today (July 20) as continued fears around rising coronavirus cases and fears of lockdowns being re-imposed in the wake of eased restrictions worldwide took hold over the market – with European, US and UK indexes and stock markets dipping on Monday morning.
With Ethereum still dipping down to just over $1,750, signs of further instability for the market remain.
Additional reporting by Reuters journalist Julien Ponthus