Dogecoin may sound like a joke investment but it's one of the faster-growing altcoins. Altcoins is the term used to encapsulate all of the cryptocurrencies that aren't Bitcoin.
Its market capitalization surpassed the $2 billion mark over the weekend. While that is growing exponentially, its value is still below one cent.
Dogecoin started in 2013 and takes its name from the Shiba Inu doge meme. On Christmas day, its market cap sat at $1 billion, and just after about two weeks, it rose to $2 billion. Its value did fall to under $1.7 billion after its large gain.
"I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over 2 years has a $1B+ market cap," said Dogecoin founder Jackson Palmer.
Dogecoin was originally started as a joke. The rise and fall of various cryptocurrencies is a concern for speculators who see the market as a bubble. Cryptocurrency's current market cap sits at over $700 billion. Its rise can be attributed to the low price, which, despite the large gain in market cap, still sits at below one cent.
When Bitcoin saw a large gain at the end of 2017, many new investors were trying to get into the cryptocurrency market. While it was too expensive to get into Bitcoin and Ethereum after such large gains, investors looked into altcoins that could see a similar rise and give a huge return on investment.
Altcoins such as Ripple, Dogecoin, and NEM have seen exponential increases in market cap due to the influx of new investors. Low cost is the current driver of their valuations. Market share of Bitcoin once exceeded 60 percent but dropped to 40 percent when investment into altcoins grew as more investors began their first investments into cryptocurrencies.
Bitcoin's price keeps dropping with people looking toward other cryptocurrencies to find the next big thing. Bitcoin started the weekend above $17,000 but dropped more than 10 percent and currently sits at just below $15,000.
More bad news for bitcoin came when China seems to be on the way out of the bitcoin mining operations. China is considered the world's capital of bitcoin mining where around 80 percent of new Bitcoins are mined in China.