Dogecoin since its inception was created as a meme coin and differs from other Cryptocurrencies created at that time in that it was meant to have infinite supply. This, according to founders was to make Dogecoin anti inflationary crypto coin. With this infinite numbers though, Doge holders have successfully pulled off series of pump and dump over the years so much so Dogecoin once flipped Bitcoin and other cryptocurrencies combined based on trading volume sometimes in January, 2014.
Dogecoin Pump and Dump
On 6-7th July 2020, based on a tiktok campaign pump to get Dogecoin to $1, Dogecoin price also spiked about 1900%. Based on tweets from Elon Musk and the Robinhood $GME stock debacle, Dogecoin appreciated by over 800% within 24 hours which led to Dogecoin setting it's all time high price after further encouragement from celebrities like Gene Simmons and Snoop Dogg and the subreddit group Wall Street bets.
I was surprised to see Elon Musk tweets this morning complaining about centralization of Dogecoin holdings in the hands of a very few whales. This he believed is one reason more people are not embracing Dogecoin and have little faith in the meme coin.
As one of the lucky few that made something substantial from my Coinpot Dogecoin faucet claims, I tried to dig deeper after Elon tweets and realised that 16 addresses holds about 49% of the total Dogecoin in circulation (source; IntoTheBlock). This, according to CEO of Binance, Changpeng Zhao shows Dogecoin distribution is very concentrated and centralized in the hands of few with 1 wallet address holding 27% of Dogecoin total supply, and top 20 wallets accounting for over 50% of the total circulating Doge.
The question is, imagine if these wallet holders decides to dump on the market? This will cause major Dogecoin price correction and that's exactly what Elon Musk is hoping for so Dogecoin can become the currency of the internet.
On Dogecoin subreddit group, a user claimed what these whales want is profit and as such will not dump on the market. He believes greed propel Whales to seek for more profits same way there are Bitcoin wallets that are inactive, these Whales can chose to be inactive for long. The question is, what happen the day they choose to be active?
For me, I believe Dogecoin is a meme coin with no real use case and as such can be held for occasional pump and dump but then again, I imagined if the man that paid Bitcoin for Pizza never did, are we all going to be here today talking about crypto trading? In essence, people gives value to crypto projects and it's one reason Crypto projects prioritize community building. So I'm waiting for the price correction, that may likely be in the region of 70% of present price to buy Dogecoin.
