What is Dogecoin?
Dogecoin is a cryptocurrency that was introduced in 2013 as a "joke currency." So why are we talking about it? Well, Dogecoin is a prime example of how social media may be able to influence cryptocurrency and even the stock market. Could this be dangerous? Maybe.
Social Media's Influence
In the past week or so, many users on the social media platform TikTok have been using Dogecoin to push a "get rich" agenda. These users are claiming that if the 800 million users on TikTok buy a small amount of Dogecoin, let's say $20, then the value of this coin will skyrocket and allow the investors to make thousands of dollars!
Now obviously this sounds a little ridiculous and some are assuming this is a "Pump and Dump." A Pump and Dump occurs when people buy large amounts of a stock or cryptocurrency and then influence others to do the same, pumping up the price of the stock. Then, when the price of the holding is high, the initial investors dump all of their stock, making a large profit but then causing the value to crash.
Did This Plan Work?
In a sense, yes the plan worked. The TikTok craze over Dogecoin did cause the coin to go up over 100% very quickly. However, after the quick rise, the dump occurred and the coin is now on the decline, and fast! The Pump and Dump method worked for some but did not achieve TikTok's "goal" of making an investment of $20 be worth thousands.
What Does This Mean?
This crazy turn of events could potentially mean that social media may be able to greatly influence the stock market and cryptocurrencies. Is this a good idea? Probably not.
Although this was not an article based on investment advice I found it as a very interesting topic to cover. Time will tell if this trend will continue or if it was just a one-time "joke" by TikTok...
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