As the calendar turned to June, it has become clear that Coinbase is finally getting into Dogecoin. The cryptocurrency platform announced that beginning on June 3, the cryptocurrency exchange would be offering Dogecoin to its Pro users as a trading option. During the Q2 of 2021, Dogecoin has been trading in a range between $0.20 and $0.70. The altcoin is up approximately 6,000% in 2021, but it’s down more than 40% since the highs reached in May of 2021. The announcement by Coinbase was made on June 1, 2021.
Coinbase and Dogecoin
The announcement by Coinbase puts Dogecoin front and center for one of the largest crypto exchanges on the planet. The Coinbase Pro service, as the name suggests, is designed for professional traders who trade the top-performing cryptocurrencies. Dogecoin is also available for purchase on Robinhood’s app and through Gemini. These platforms allow you to send Dogecoin to an address and invest in the cryptocurrency or spend it if you have a vendor that will accept the cryptocurrency as a payment asset. Coinbase initially reported in a blog post that it would begin receiving inbound transfers of Dogecoin to Coinbase Pro. If there is enough liquidity, the trading of Dogecoin will start in supported locations. However, trading will be staggered.
Coinbase reported that it would launch the trading of Dogecoin in three phases. This trading includes post-only, limit-only, and full trading. The company also said that if there is a point when the new order book does not meet the level of the exchange of assessment for an orderly market, they may keep the book in one of the initial states for a more extended period or even suspend the trading of Dogecoin. Dogecoin will initially only be available on Coinbase’s primary website or its consumer mobile apps.
What is Dogecoin?
Software engineers Billy Marcus and Jackson Palmer created Dogecoin in late 2013. Palmer branded the cryptocurrency’s logo using a meme. In early 2021, Dogecoin gained cult status on Reddit’s WallStreetBets message board. Among its boosters is Tesla CEO Elon Musk, who called Dogecoin his favorite cryptocurrency.
Similar to Bitcoin, Dogecoin is a cryptocurrency that runs on blockchain technology. Blockchain is a distributed, ledger that stores all transactions made using a decentralized digital currency.
Like other cryptocurrencies, Dogecoin’s blockchain network uses cryptography to keep all transactions secure. Similar to both Bitcoin and Ethereum, Dogecoin is mined. People called miners to use computers to solve complex mathematical equations to confirm transactions and record them on the Dogecoin blockchain. In exchange for processing transactions and supporting the blockchain ledger, miners earn additional Dogecoin.
Some investors feel Dogecoin is not a good value proposition compared to other digital coins such as Bitcoin and Ethereum. This scenario is because there is no lifetime cap on the number of Dogecoins created by mining Dogecoin. When both Bitcoin and Ethereum were created, a maximum number of coins were created, and therefore, as the number of coins that can be produced declines, the coins become more valuable. Making Dogecoin a digital coin with total production value, the cryptocurrency is less highly inflationary by design. The blockchain rewards miners for their work by creating a digital coin as a reward for verifying transactions.
Dogecoin has soared in popularity this year despite starting as a satirical homage to bitcoin in 2013, meant by its founder. Underscoring how ridiculous it was meant to be, they set it up so that there is no limit to how many Dogecoins can be generated, unlike the finite number of bitcoin that can ever exist. Dogecoin miners need to operate fast-running computers; similar mining processes work with Bitcoin and Ethereum, which can unlock new tokens by solving complex mathematical puzzles.
Elon Musk Buoyed Dogecoin
Musk has been one of the biggest supporters of Dogecoin. Musk’s tweeting has bothered regulators as it can move stocks and cryptocurrencies. Mr. Musk’s use of Twitter had twice violated a court-ordered policy requiring his tweets to be preapproved by company lawyers. Mr. Musk’s comments can frequently range far beyond Tesla and cryptocurrencies. The issue is that Musk can sway corners of the crypto market too.
The Bottom Line
Dogecoin is front and center, and its elevation to the Coinbase trading platform shows that the altcoin has made it mainstream. The listing of Dogecoin will join the likes of Ethereum and Litecoin and several other altcoins that are now available on Coinbase. In 2021, Coinbase issued an initial public offering and is one of the few cryptocurrency exchanges publicly traded and provides their financials to their shareholders and the public. This type of regulation helps give a backdrop that allows investors to feel confident in the products they offer those who have professional crypto trading accounts. If Dogecoin experiences two-way trading flow and rising liquidity, the digital coin will have found a permanent home on the largest exchange in the United States.