Dogecoin Mania reaches Indian crypto exchanges
Named after a meme of the Japanese dog breed Shiba Inu and with supporters such as Tesla’s Elon Musk, the cryptocurrency has risen more than 10 times in the past three months, with a market cap of nearly $ 80 billion Thursday.
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Indian cryptocurrency exchanges are now registering record Dogecoin trading volumes, causing a massive increase in traffic on these platforms.
Binance-owned WazirX’s Doge / INR trading on Wednesday slowed down its system, with the platform seeing record traffic that it lacked the capacity to support.
Soon #WazirXScam tends to use the Twitter microblogging, with users complaining about unfulfilled Doge trades.
Me at @WazirXIndia now #dogecoin #Crypto #WazirXScam https://t.co/S1nI3smAbb
– Aashvi vijay (@AashviVijay) 1620192914000
CoinSwitch Kuber, backed by Sequoia Capital and Tiger Global, saw 200% growth in Dogecoin volumes month over month, with a 1300% jump for Dogecoin in the past two weeks alone.
Dogecoin volumes and prices are also peaking across the world with Musk’s highly anticipated appearance on a US TV show on May 8.
Musk hinted at discussing Dogecoin when it appeared on Saturday Night Live, pushing retail investors to invest in the crypto asset.
Traders active on WazirX jumped 123% in April and have continued to grow on other platforms like CoinDCX.
Nischal Shetty, founder of WazirX, said the platform was being restructured to cope with the surge expected on May 8, which could double or triple from Wednesday’s peak.
Shetty estimates that Dogecoins worth Rs 600 crore have been traded on the platform in the past 24 hours. On Coinswitch Kuber, average daily volumes have been around Rs 100 crore over the past two weeks.
Most Indian crypto exchanges have listed the token, although some like ZebPay have walked away despite investor interest.
“We can list it, but first I’d like to be sure it’s not just 21st century Tulip Mania,” ZebPay COO Vikram Rangala said, referring to one of the bubbles and crashes most infamous market of all. time in the 1600s.
Unlike other cryptocurrencies that are either in limited circulation – making it a store of value – or have use cases like smart contracts, Doge’s use cases have been limited to tips on Twitter and Reddit for great content.
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Its official website describes the currency as “an open-source peer-to-peer digital currency, promoted by Shiba Inus around the world.”
There are over 129 billion Doge tokens in circulation, according to Coinmarketcap.com, and more can be mined.
Nithin Kamath, managing director of online brokerage firm Zerodha, said the lack of crypto regulations leaves the industry vulnerable to manipulation, unlike strict capital market regulations that make it easier to track activity. that artificially inflate the price of a share.
“I can’t really figure out what’s going on with Dogecoin,” Kamath said. “With no controls in place, the risks of some of the currencies like Dogecoin being a pump and dump system are quite high. I think the best way to play is to not allocate more than 1% to 5% of your liquid net worth to assets where speculative activity is high enough, ”Kamath said.
The best way to protect investors in a risky asset class like Doge is to restrict trading of the asset to high net worth individuals and blockchain experts, said Mathew Chacko, partner at Spice Route Legal.
The majority of crypto traders in India are under the age of 25.
Users say that if enough people value the cryptocurrency, the token ends up becoming valuable to that community, and use cases end up happening.
“I don’t want to sell my Dogecoins no matter what,” said Siddharam Ishwarkatti, a 42-year-old engineer working for a multinational company who started investing in cryptocurrency this year. “Even if it goes to 100, I won’t sell it. These currencies could have a future. Bitcoin had no value at startup. ”
Dogecoin is an introductory crypto token for several new users like 19-year-old Ishwarkatti and Mrityunjaya Lala who wish to invest limited resources.
The fear of missing out and the thrill of owning a meme stock, along with the strong influence of Tesla’s Musk, drives many new traders to Dogecoin, even if they don’t fully understand blockchain technology.
Priyanshu Singh, a 19 year old B Tech. Kanpur student, also hopes to use his profits from the Dogecoin rally to invest in more stable coins like Ethereum and Bitcoin futures.
Longtime proponents of the future of crypto and blockchain technology claim that Dogecoin distracts people from the true value of crypto because it makes the industry return quick.
Dogecoin peaked and collapsed in its nearly 8-year existence, based on external influences such as a community of Dogecoin Redditors supporting players from the 2014 Sochi Olympics who lacked funds , influential people adopting and promoting the token.
Crypto policy expert Tanvi Ratna on new age social movements like GameStop and Doge Frenzy
The most recent peak was in January when Musk tweeted a fake “Mastiff” magazine cover. The cryptocurrency discussion surged on WallStreetBets, the Reddit forum responsible for the rise in GameStop’s share price.
your welcome https://t.co/e2KF57KLxb
– Elon Musk (@elonmusk) 1612425450000
Several industry experts have drawn parallels between Doge’s current price spike and the GameStop short-term squeeze earlier this year.
“I think Dogecoin, like GameStop, is one of those social movement markers that shatter age-old concepts of what defines money,” said Tanvi Ratna, chief executive of the Policy 4.0 think tank. “What appears to be frivolous gambling attracts serious amounts of real money and challenges ideas around the legitimacy of money still coming out of the state. This dynamic worries most governments. ”
GameStop’s now infamous Squeeze Shorts propelled the video game retailer’s inventory to nearly $ 160 on Wednesday, increasing more than 30 times since the start of the year.
The rating agency S&P Global Ratings also raised the credit rating of the share from B- to B. on Wednesday.
“While the risks associated with investing in Dogecoin are numerous, the framework does not provide legally viable remedies,” said Anu Monga, AnantLaw partner and technology regulation expert. “Due to the volatility of Dogecoin, the UK’s financial regulator has clearly warned people who invest in crypto assets such as Dogecoin to do so at their own risk.”
Currently in India there is no legal framework to deal with private cryptocurrencies.
The Cryptocurrency and Official Digital Currency Regulation Bill, 2021, which provides for the release of an official digital currency by the RBI, is under consideration by the government.