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The Tesla CEO has repeatedly provoked a rise in the cost of the comic altcoin Dogecoin (DOGE). Then he switched to another meme token – Shiba Inu (SHIB). The result is visible to the naked eye – this is intense competition between the two digital currencies, which periodically bypass each other in terms of capitalization and change places in the rating.
This week, the billionaire praised DOGE again on Twitter and in an interview with legendary Time magazine. According to Musk, using the popular token when paying for goods and services is even easier and more convenient than Bitcoin.
In the meantime, the rise of Dogecoin in the spot market has led to a surge in interest in DOGE and on futures platforms. Therefore, today’s digest is dedicated to the meme cryptocurrency and the assessment of its future prospects.
Rocket or Bubble?
In 24 hours, the DOGE rate has skyrocketed by 25.33% – up to $ 0.2046. By Tuesday evening, the growth rate had slowed slightly and Dogecoin was trading at $ 0.193. Cryptocurrency capitalization increased to $ 25.573 billion.
The coin initially climbed to ninth place in the ranking of the largest digital currencies, surpassing Polkadot (DOT), but then returned to tenth place.
It seems that the rise of DOGE again owes Musk: the billionaire gave an interview to the popular Time magazine, and during the conversation he spoke in detail about the differences between Bitcoin and Dogecoin.
According to him, BTC should be seen as a safe haven asset. This instrument hedges inflation and other risks. The total amount of transactions with bitcoin in dollar terms is significantly ahead of the volume of transactions with DOGE, so the leading digital currency is much more expensive than a token. Dogecoin can be used to pay for goods and services as it is significantly cheaper and transaction fees are much lower compared to Bitcoin.
But we should not forget that DOGE is prone to inflation, and this token is better spent than hoarding, said the CEO of Tesla. The billionaire admitted that the coin was originally created for fun, and few believed in its future.
A little later – on Twitter – Elon Musk announced Tesla’s plans to start accepting DOGE as payment for individual goods in order to assess the viability of such calculations.
Whales put on DOGE
After Musk’s praises, the average daily number of transactions on the Dogecoin network jumped to 24,528 (according to BitinfoCharts). In parallel, the volumes of each transaction on the blockchain increased.
Now DOGE addresses jointly implement transactions for more than $ 467,000. Curiously, the interest of whales in the token has been weakening since November. But Tesla CEO’s statements are likely to spark a new surge in big business activity.
According to the WhaleStats service, DOGE is included in the rating of the most popular cryptocurrencies among investors who control digital assets worth at least $ 200 million. Moreover, the decline in the value of altcoin attracted whales, as they got a chance to buy on comfortable terms.
According to the most conservative estimates, more than 2% of whale wallets deployed on Binance Chain contain Dogecoin, analysts write. Among the large holders, mining pools stand out, striving to extract as many coins as possible.
According to CoinMetrics, the profitability of DOGE mining has been increasing since May 2021. Computing power is also growing, which indicates a positive attitude of the earners. This week the network hash rate exceeded 344.432 terahesh per second (TH / s).
Has Hype covered the institutional?
The rise in the value of DOGE on the spot market could not but provoke a surge in the activity of hedge funds focused on altcoins.
On December 14, open interest in DOGE futures soared from $ 316.24 million to $ 487.57 million, according to CoinGlass.
In terms of the amount of contracts for this product, the Binance exchange is in the lead. Here, open interest in Dogecoin futures jumped to $ 236 million.
The second and third places were shared by the FTX and OKEx platforms – $ 121.84 million and $ 62.66 million, respectively.
By the way, the interest of institutional investors in DOGE futures reached an all-time high on May 8, 2021. On that day, the amount of open contracts exceeded $ 1.15 billion, but by the end of July it had collapsed to $ 265 million.
Sources: CoinGlass, Twitter, CoinMarketCap, WhaleStates, The Block, CoinTelegraph, BitinfoCharts
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