The surge brought the total market capitalisation of all cryptocurrencies to $1.07 trillion on Friday, which is greater than the combined value of payment giants PayPal, Mastercard and Visa.
Dogecoin, which was originally created in 2013 as a light-hearted take on the emerging crypto movement, saw the biggest gains of more than 500 per cent over the last 24 hours to take its value above $0.05.
The cryptocurrency has long enjoyed a cult-like following among online forums and retail investors appeared to flock towards it in response to trading limitations being placed on certain stocks that were pumped by the equally meme-loving Reddit forum WallStreetBets.
“While the stock market is still going wild, fuelled by an epic battle between Redditors and hedge funds, a similar hype is now being triggered with dogecoin,” Eric Demuth, CEO and founder of cryptocurrency broker Bitpanda, told The Independent.
“The most interesting aspect is how social communities on the internet now have an immense influence on the volatility and direction certain assets will go into. What we are seeing is a historical power shift from the elite to retail investors – and this is just the beginning.”
Bitcoin saw considerable gains on Friday morning after Elon Musk appeared to pledge his support for the cryptocurrency following the fall-out from Robinhood’s decision to block users from purchasing certain stock.
The SpaceX and Tesla CEO switched his Twitter bio to simply “#bitcoin”, and within minutes the price had jumped by nearly $5,000 to over $37,000.
The endorsement from the world’s richest person, combined with the apparent migration of retail investors from traditional stocks towards cryptocurrencies, means “the weekend ahead will be a fun one”, according to Mr Demuth.
“We are witnessing a bottom-up revolution that rattles the financial industry,” he said.
Bitcoin’s latest price increase follows nearly 10 months of mostly positive market movement, which has seen it rise from below $5,000 last March. It still remains several thousand dollars off its peak, having reached above $41,000 earlier this month, however sudden spikes in both directions are not uncommon due to the relative lack of regulation and ease of use.
Unlike traditional stocks, it is difficult to place trading limits on cryptocurrencies like bitcoin and dogecoin due to their decentralised design. Even during periods of extreme market volatility, no major exchange has ever blocked users from buying or selling established cryptocurrencies.
“An increasing recognition of bitcoin’s distinctive traits should outlast the current GameStop interest,” said Paolo Ardoino, chief technology officer of cryptocurrency exchange Bitfinex.
"While nascent, cryptocurrencies have the potential to invert the power structure of inequitable financial markets that are weighed against retail investors.
“I won’t speculate on whether this is a one-off event or not, but I’m confident that these types of social channels have the potential to cause further disruption to the status quo and challenge the financial elite.”
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