By Caitlin Ostroff
Dogecoin got a new lease on life Wednesday, with the price rallying sharply after Coinbase Global Inc. said it would allow users to trade the joke cryptocurrency on a platform that is geared toward more experienced investors. Fresh tweets from Tesla CEO Elon Musk also provided a catalyst.
The price of dogecoin jumped 21% from its Tuesday 5 p.m. ET level to trade near 41 U.S. cents, its highest in about two weeks, according to CoinDesk. That gives the cryptocurrency, which was designed to serve no real purpose, a market value of about $53 billion. Still, it has lost almost half its value from its May peak.
The debut on Coinbase Pro means users of the hugely popular cryptocurrency exchange can now trade dogecoin for the first time by signing up for its free professional platform, which offers advanced charting and analytical tools. It provides an alternative to platforms available from Robinhood Markets Inc., Bittrex Global GmbH and Payward Inc.'s Kraken.
Individual investors have been clamoring online this year for Coinbase to start supporting the cryptocurrency as a manic rally spurred the prices of an array of digital assets including bitcoin, ether, SafeMoon and dogecoin to unprecedented heights. Coinbase tapped into the frenzied rush for cryptocurrency trading by listing its own shares in April, a move that spurred bitcoin prices to a record $64,802.
Dogecoin has soared in popularity this year despite starting out as a satirical homage to bitcoin in 2013, meant by its founders to mock the craze for cryptocurrencies at that time. Underscoring how ridiculous it was meant to be, they set it up so that there is no limit to how many dogecoin can be generated, unlike the finite number of bitcoin that can ever exist. Dogecoin miners operating fast-running computers can unlock new tokens by solving complex mathematical puzzles.
Dogecoin's price has tumbled since early May, when Mr. Musk called it "a hustle" on a "Saturday Night Live" episode. That took many investors by surprise: Tweets by Mr. Musk that seemed to promote the cryptocurrency had drawn attention to dogecoin and helped fuel its almost 9,000% rally this year.
After Coinbase said Tuesday that it would support dogecoin trading, Mr. Musk reshared a July 2020 meme showing the cryptocurrency subsuming the global financial system, with the comment, "It's inevitable." He also suggested that he planned to adopt a Shiba Inu -- the Japanese dog breed that inspired the doge meme and dogecoin -- later this year.
His support of cryptocurrencies has won him fans in the community, especially with dogecoin supporters who have cheered it "to the moon," but also sparked backlash when his comments led to steep losses for individual investors.
Mr. Musk's prolific tweeting has also irked officials at the Securities and Exchange Commission, as it can move Tesla's stock. Securities regulators told the electric-vehicle company last year that Mr. Musk's use of Twitter had twice violated a court-ordered policy requiring his tweets to be preapproved by company lawyers, according to records obtained by The Wall Street Journal.
Mr. Musk's comments can frequently range far beyond Tesla and cryptocurrencies, and hold sway over other corners of the market too. On Wednesday, shares of Samsung Publishing Co. Ltd., which owns a stake in the producer of "Baby Shark," climbed over 6% in South Korean trading after Mr. Musk tweeted the viral children's song with a note saying, "Baby Shark crushes all! More views than humans."
Trading in dogecoin could begin on Coinbase at noon ET on Thursday, the company said. But that is if customers transfer their holdings of the token to Coinbase Pro to generate ample ability to buy or sell the asset.
For now, dogecoin won't be available on Coinbase's general investment platform, which has a simpler interface, is aimed at newer investors and offers fewer trading options.
Gains in other cryptocurrencies were more muted on Wednesday, with bitcoin up 4.8% from its 5 p.m. ET Tuesday level to $38,091.65, while ether rose 8.1%.
Write to Caitlin Ostroff at firstname.lastname@example.org
(END) Dow Jones Newswires