Today’s Slump of Dogecoin Explained
Dogecoin, the meme-inspired cryptocurrency with a market capitalisation of nearly $10bn, has declined 0.9% over the past 24 hours, amid contagion fears and concerns over its valuation and utility. The dip follows the plunge of crypto bank Silvergate Capital last week. Concerns that Elon Musk is shifting his focus and may not continue supporting Dogecoin have also had an impact. The token’s valuation is largely based on hype, making it dependent on Musk’s support. As a high-risk, high-valuation asset, Dogecoin surged during the post-pandemic rally of 2021, but has lost nearly 90% of its value since peaking above $0.68. Uncertainty surrounding interest rates means investors are taking a cautious view of risk assets.
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