Dogecoin (CCC:DOGE-USD), the cryptocurrency that was originally founded as a joke in 2013, has been having a rough time lately. As of June 18, it was trading below 30 cents per token (29.75 cents). This is 56.6% off its peak of 68.477 cents on May 5. Dogecoin is going through a rough patch here, and it could take a while to recover.
Moreover, it looks like Dogecoin’s recent listing on Coinbase (NASDAQ:COIN) exchange couldn’t help its performance. This occurred during the first week of June when Dogecoin started the month at 42.33 cents. It has basically slid 30% in the past several weeks.
In addition, Coinbase, the largest U.S. exchange, said it would give away $1.2 million in Dogecoin. To be eligible for the raffle, you had to buy $100 or more of Dogecoin. But that didn’t help as well. (Full disclosure here — I fell for this promotion and haven’t heard diddly from Coinbase).
Dogecoin Remains Popular
That said, Dogecoin is still quite a popular cryptocurrency. For one, it is still up 51 times (i.e., 5,100%) since the end of last year when it closed at 0.5685 cents. That is one of the single best performance measures of any crypto in the world.
That could also go a long way to explaining its present market value of $38.6 billion. This makes it the sixth-largest market value in the crypto universe, according to Coinmarketcap.com. That puts it just below Cardano (CCC:ADA-USD), which has as $45.9 billion market value.
But for all its popularity as measured by its market cap, the fact is Dogecoin has performed poorly, especially compared to Bitcoin (CCC:BTC-USD). This was the point in a recent article by Decrypt.co, which compared the performance of the two cryptos since the Coinbase announcement. The article also pointed that Elon Musk seems to have a greater influence on the crypto than just about anything else.
Musk’s ability to move the prices of both Bitcoin and Dogecoin (and any other crypto) was the subject of a recent Bloomberg opinion article. They implied that his influence is much greater than Warren Buffett’s influence on stocks. After all, he is the second-richest person in the world and an entrepreneur par excellence. I wrote at the end of May that he is effectively acting as the CEO of the crypto by directing and funding a group of crypto software developers.
But Musk has been quiet on the crypto recently, especially on Twitter (NYSE:TWTR). A little over a month ago, Musk went on Saturday Night Live and essentially made fun of Dogecoin. He ended up calling it a “hustle.” Since then, he has more or less been quiet on the crypto.
At one point last month, Elon Musk said he hasn’t and won’t sell his holdings in Dogecoin and he called himself the “ultimate hodler.” (A hodler is a purposely misspelled version of “holder,” just because everything is different in the crypto world.) I guess in Musk-speak that is some form of guarantee. But of course, Musk has made huge flip flops on Bitcoin — at one point saying Tesla (NASDAQ:TSLA) wouldn’t accept is as payment, and then subsequently reversing himself.
A small number of companies are now willing to accept Dogecoin as a payment mechanism. For example, recently SpaceX said it would accept Dogecoin for payment for its upcoming lunar missions. In addition, Coin Cloud, a cryptocurrency ATM company, has begun installing ATMs that process Bitcoin and Dogecoin. They were set to be installed in a Houston, Texas supermarket chain named H-E-B Stores. The ATMs essentially allow individuals to buy and sell Bitcoin and Dogecoin on a non-exchange basis. This will help make Dogecoin more accepted as a crypto asset for people who don’t want to set up an account on an exchange or wallet.
Where This Leaves Dogecoin
This shows that slowly but surely Dogecoin is gaining acceptance around the world as a legitimate crypto asset. For example, Revolut, a U.K.-based digital banking service, recently added Dogecoin to its crypto offerings. They announced that this was in response to consumer requests and demand on their fintech site.
As a result, expect to see Dogecoin regain some of its popularity and climb out of its recent trough as the year progresses. Keep in mind, though, that this is a speculative asset play, and most defensive investors should not make it a large portion of their investment portfolio.
On the date of publication, Mark R. Hake has a long position in both Bitcoin and Dogecoin. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.