Irrational Pumping: ETC and DOGE Rise in a Frenzy
Written By: Isha Goel | May 5 2021
This week’s superstar cryptocurrency dabbles between Ethereum Classic (ETC) and Dogecoin (DOGE) as speculative traders have taken the reigns and are pumping them to the moon. The bull frenzy within the cryptocurrency market has rallied Bitcoin (BTC) and Ethereum (ETH) over the last year but this week proved significant for tokens like ETC as well.
Forgotten Token Picking Up
Momentum from the potential growth of decentralized finance caused ETH to quadruple and BTC to double, while ETC had only gained 26% in the past year. All that changed this week with a record performance in its four-year history when prices nearly tripled between May 2nd and May 7th. This token was created from a hard fork of the Ethereum blockchain and analysts in the digital-asset class believe there is still potential for ‘almost-left-to-dead cryptocurrency projects that were created during the last big bull market in 2017.’ It appears that the DOGE frenzy may be spilling over to ETC.
Credit for image: Coinbase
SNL May Make or Break DOGE
Speaking of DOGE, buyers have been pumping the stock in anticipation of Saturday night. Elon Musk is scheduled to appear on Saturday Night Live this weekend and has a history of tweeting in favor of this cryptocurrency. A mention on Saturday’s show would potentially cause exponential price movement and several tease videos of Musk on the streets of NYC discussing crypto have instilled hope in these speculative buyers. It may present an opportunity for DOGE to finally break the elusive $1 barrier.
Others erring on the more cautious side of the discussion do not believe this will actually affect the price though, or at least not immediately. They are skeptical again DOGE hitting $1 by May 10 simply because there appears to be a higher chance of a payout if one correctly bets against a mention. On May 7th, the coin fluctuated between 56¢ and 64¢ in a holding pattern in anticipation of the show the following night.
The Frenzy Has Potential to Continue For A While
Between all the frenzy, the overall cryptocurrency market is seeing a step back from informed bets as traders continue learning more about the market through experience. Ki Young Ju, the chief executive of CrytoQuant, says that ‘It’s a crazy, irrational market right now,’ and that it may be a way to preemptively hedge against the inflation caused by the coronavirus-prompted monetary stimulus. While BTC’s rally was primarily insinuated by institutional investors in North America, ETC’s gains are more attributed to retail investors in both the West and the East similar to DOGE. Now ranked 16th by market value, ETC increased by 128% in just the first 5 days of May, outrunning the performance of DOGE, which rallied by 90% to 0.69 and set a new record early May 5th.
Credit for image: Coinbase
The CEO of The TIE, Joshua Frank provided interesting social media analytical insights that may have contributed to the price movement as well. He noticed that ETC was ‘trading at more than a 50% premium on U.S.-based, retail-focused crypto trading platforms including Robinhood and Coinbase, compared with prices at roughly the same time on other native cryptocurrency exchanges such as Binance.’ This suggests that there is a rising demand from American retail investors and explains the large spread in price that institutional investors likely were not capable of producing. Moreover, the increased volume of ETC tweets indicates that ‘a mass market’ could be behind the outperformance. Analysts have expressed concern that a pump will eventually result in a dump and that ‘investors will get burned at some point,’ but until then, there is potential for continued profits for retail investors.
Work Cited
Godbole, Omkar. “Ethereum Classic Hits All-Time High Price, Beats Dogecoin.” CoinDesk, CoinDesk, 5 May 2021, www.coindesk.com/ethereum-classic-surges-record-high-outperforming-dogecoin.
Hackett, Robert. “Saturday Night Could Make or Break Dogecoin.” Fortune, Fortune, 7 May 2021, fortune.com/2021/05/06/dogecoin-price-stock-buy-doge-elon-musk-snl-saturday-night-live/.
Morris, Chris. “Will Elon Musk’s SNL Appearance Help Dogecoin Break $1?” Yahoo! Finance, Yahoo!, 7 May 2021, finance.yahoo.com/news/elon-musk-snl-appearance-help-155730588.html.
Shen, Muyao. “Ethereum Classic’s ‘Irrational’ Price Tripling Bears Hallmark of Dogecoin Frenzy.” CoinDesk, CoinDesk, 7 May 2021, www.coindesk.com/ethereum-classic-tripling-price-dogecoin.
Sriram, Samyuktha. “’I Know Where The DOGE Money Is Going Next,’ Says Grayscale CEO As Ethereum Classic, Bitcoin Diamond Skyrocket.” Benzinga, 7 May 2021,
www.benzinga.com/markets/cryptocurrency/21/05/21009414/i-know-where-the-doge-money-is-going-ne xt-says-grayscale-ceo-as-ethereum-classic-bitcoin-d.