Dogecoin, Gamestop and Reddit - A Flash In The Pan Or A Sign Of Things To Come?
In the first few months of 2021, the popular discussion website Reddit unwieldy unprecedented power over the world of finance and investing - firstly with the now infamous Gamestop saga, then later with the remarkable resurgence of Dogecoin.
Of course, cryptocurrency by its very nature is firmly entrenched in the zeitgeist of modern technological thinking, but it’s probably fair to say that most investors were somewhat blindsided by the meteoric and community-driven price rises of the aforementioned assets - the question now is, are we likely to see similar patterns in the future?
The Gamestop Saga - a Recap
If you read the financial headlines at any point during the first few weeks of 2021, then you’ll undoubtedly have at least a passing familiarity with Gamestop. The beleaguered games retailer suddenly hit the headlines when its stock value soared from $40 to $400 in just a few days - despite the company being thought to be on its last legs.
Of course, there have been remarkable bull markets before, but what’s significant about the Gamestop saga is that it was largely a contrived plan cooked up by a community on Reddit. A notorious subgroup called r/WallStreetBets became a hotbed for rebellion and the community decided to take on the institutional investors who were short selling on Gamestop by buying up all the outstanding stock and driving prices up.
The campaign gathered serious momentum and eventually went viral, with general public rushing to cash in on the sudden meteoric rise of GameStop stock. Of course, this only drove prices up further and left many of those who had short-sold unable to close their positions.
The results of the Reddit campaign were nothing short of phenomenal and showed the world just how influential online communities can be on the financial market.
The Power of the Dogecoin Community
So what has all this to do with cryptocurrency? Well, as the Gamestop frenzy approached its zenith, the Dogecoin community decided it too wanted to rally to the cause and it was again the r/WallStreetBets subreddit where the seeds of dissent were sown.
Having been in on the Gamestop saga from the ground level, Reddit users began to speculate on the possibility of Dogecoin being next in line for a community-driven price rally and conspired to start a buyout. The strategy had some help when Tesla CEO Elon Musk appeared to lend his support to DOGE and then the touch paper was lit - the price of Dogecoin surged by 800% in just 24 hours.
Having a second Reddit-driven price surge reaffirmed the significant potential of the online community and given that Dogecoin is famous for its loyal following, it begs the question as to whether the same effect can be replicated further down the line.
The Musk Effect
It’s fair to say that Elon Musk had something to do with Dogecoin’s success in 2021. The Tesla billionaire appeared to tweet his support for Dogecoin numerous times over the months leading up to its meteoric price run. Most of these tweets fairly non-commital, things like “who let the Doge out” or the occasional Doge-themed meme, but many took them to be an endorsement of Dogecoin.
Musk also voiced support for it while speaking on Clubhouse: “Dogecoin was made as a joke to make fun of cryptocurrencies, but fate loves irony. The most ironic outcome would be that Dogecoin becomes the currency of Earth in the future.”
Someone like Elon Musk wields a lot of influence on the world of finance and commerce and he has also previously helped to drive the price of Bitcoin when Tesla added $1bn worth of BTC to its investment portfolio. Conversely, BTC also took a hit when Musk announced that Tesla would no longer be accepting the cryptocurrency.
It seems the love affair between Musk and Dogecoin is far from over. At the start of July he once again took to Twitter, calling on his followers to “release the Doge”. The price of Dogecoin then jumped by 4%.
These things considered, it seems that anyone looking to invest in Dogecoin should be paying attention to the Dogefather’s social media accounts, as well as any related Reddit groups.
Read Also: Why Dogecoin Will Skyrocket
Which Cryptocurrencies Are Hot on Reddit Right Now?
There’s no denying that Dogecoin’s community is one of the key drivers behind its continued success and that community’s arena is predominantly Reddit. But it’s worth considering which other tokens might have the potential for a future Reddit-drive price bonanza. These are some of the top subreddits on the site right now:
If you’re new to Reddit, then inevitably you really need to follow the Bitcoin discussion. As the cryptocurrency market continues to see significant changes in 2021, it’s more important than ever to have an idea of the current sentiment towards BTC.
Shiba Inu has been touted as a Dogecoin killer and was more or less set up to try and emulate DOGE’s community-led success. It stands to reason then, that the SHIB Reddit is one to keep an eye on. With over 200,000 members, it certainly has the numbers to make waves in the crypto market.
Tronix aims to revolutionise the world of online content sharing for the entertainment industry. This means that it is especially important for the token to have online support. The TRX Reddit community is highly active and could well be a reliable indicator of the potential for future Tronix uptake.
Decentraland is an interesting concept that seeks to apply the advantages of blockchain to the world of video gaming. Naturally, this is a community that is very vocal online and given the amount of users on Reddit, it's worth keeping an eye on the r/decentraland to see how the idea is catching on.
Finally, this is an older sub-reddit and, as the name suggests, it’s devoted to any cryptocurrency that isn’t Bitcoin. If you haven’t used Reddit much or don’t feel inclined to peruse the discussions on individual tokens, then this is a good place to get an idea for what’s going on across the altcoin landscape.
Whilst no investment strategy should be based around anything you read on Reddit, the above subreddits could prove valuable sources of information that you can factor into your own research.
Many mainstream investors have dismissed the Reddit-driven price rises of Dogecoin and Gamestop as nothing more than tulip mania. However, given the constantly changing online environment, this could be an oversimplification.
It’s perfectly plausible that online forums will take the lead when it comes to generating positive sentiment for any financial asset, but especially cryptocurrency.
It’s probably fair to say that community-driven price bonanzas will struggle to reach the same magnitude as the Gamestop and Dogecoin events, there is every chance that we will see similar things occur in the future.
It’s also likely that comments from influential figures in the world of finance and business will ultimately be needed to fuel the flames of any potential Reddit campaigns.
Ultimately, there’s no way of predicting these events but investors who regularly consult the Reddit feeds will at least stand a chance of identifying the trends before they reach their peak. Of course, it’s also a good idea to follow Elon Musk on Twitter - just in case.
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Will Reddit users drive Dogecoin’s price up again?
Dogecoin is famous for its loyal community and this was demonstrated when Reddit users sent its price soaring early in 2021. Whilst there could well be another Reddit-driven DOGE bull, it’s worth remembering that the campaign benefitted hugely from timely tweets from Elon Musk. It’s hard to tell how successful Reddit campaigns will be without some kind of celebrity influence.
Does Elon Musk support Dogecoin?
Musk was actually voted the Dogecoin CEO and has been nicknamed the Dogefather by many. That being said, Musk’s apparent support for Doge is largely down to speculation. His tweets have often been simple remarks that have certainly been positive, but hardly express any significant commitment from the Tesla mastermind.
What are the best crypto sub-Reddits?
We have suggested a few crypto sub-Reddits to keep an eye on in the article above. However, if you’d like to explore things further, you might like to check out our post on cryptocurrency subreddits to follow. Here you’ll find out picks for some of the most active and influential discussions on digital currency.
Where can I buy Dogecoin?
If you’re looking to buy Dogecoin then we’d recommend heading over to eToro. The exchange has one of the best reputations in the industry and its trading platform is easy to get to grips with. You’ll also find numerous other cryptos listed.