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Driven by Elon Musk, Dogecoin users tripled in 2021

Dogecoin users tripled in 2021 after the Elon Musk impulse. According to Chainalysis, Dogecoin went from being a joke meme to being one of the most popular cryptocurrencies. The DOGE blockchain has reached more than 150,000 daily active users in 2021.

According to the most recent Chainalysis report, released on August 13th, the number of investors interested in Dogecoin (DOGE) has risen to levels not seen since the 2017 bull market.

The data collected by the blockchain analysis firm indicates that the level of participation of this platform in the market offer went from 9% in July 2020 to 25% in August 2021. This variation in the percentage shows that the number of users of the platform has tripled in just one year.

The report is the first that Chainalysis publishes on Dogecoin, after having announced, this week, its decision to include the cryptocurrency in the market studies it delivers to its clients, based on data collected by the company.

According to the company, Dogecoin has gone from being a joke meme to becoming one of the most popular currencies on the market, moving large volumes in transactions, especially this year.

His calculations estimate that there are currently about 4 million dogecoin holders on-chain (outside of exchanges and custodial services), with an average of 32,000 daily active users so far in 2021.

As can be seen in the following graph, the growth of investors has been correlated with the rise in the price of DOGE, which went from USD 0.005 in January to USD 0.304 in August:

Dogecoin users tripled in 2021 after the Elon Musk impulse. According to Chainalysis, Dogecoin went from being a joke meme to being one of the most popular cryptocurrencies. The DOGE blockchain has reached more than 150,000 daily active users in 2021.
The daily active users of the Dogecoin platform surpassed 150,000 in May, during the period of the highest price increase for DOGE. 
Source: Chainalysis.

Analysts show data on the growth of the number of DOGE investors over these 8 years:

74% of the current offer was drawn in 2014. Once the initial distribution was established, the liquid offer and the new investors, those with less than 6 months, kept 30% of the offer in 2015. New investors entered as the price rose in 2016, acquiring 13% of the offer. Liquid supply and new investors increased in 2017. Together they accounted for 70% of supply in early 2018. Liquidity declined thereafter and new investors clung to their Doge, becoming longer-term investors.

Chainalysis.

The increase in the number of investors began to be more significant in 2020, but it skyrocketed throughout 2021.

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The rise of the meme cryptocurrency began to garner media attention in January at the hands of billionaire Tesla owner Elon Musk and Reddit users, who helped drive up the price. And with this rise in the price, DOGE sneaks into the top 10 crypto assets with the highest market capitalization.

The figures also indicate that investors who acquired dogecoins in the past six months now own 25% of the offering. This, while those who have held the cryptocurrency for more than two years reduce their participation, going from 30% in July 2020 to 20% today.

DOGE’s blockchain is highly concentrated

The Chainalysis report also points out that – despite the steady increase in the number of investors – the platform is highly concentrated. A feature that Coin Metrics analysts Elon Musk and even Binance CEO Changpeng Zhao pointed out last February.

It is thus explained that 82% of the offer of the crypto asset, about 106,000 million of the total of 130,000 million of DOGE, are in the hands of 535 entities. Each owns more than 10 million dogecoins.

37 billion of the 106 billion Doge are in the hands of only 31 investors who have had their DOGE between 6 months and 2 years, that is, more than one billion DOGE each on average.

Chainalysis.

It is then a very small number of entities, according to the Chainalysis study, made up mainly of retail exchanges or first investors that are characterized by making few withdrawals on the blockchain.

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“This is likely to be a combination of businesses, such as exchanges that store cryptocurrencies on behalf of millions of merchants and some of the now-wealthy early investors,” they say.

distribucion dogecoins segun entidades Driven by Elon Musk, Dogecoin users tripled in 2021
Some 535 entities own 82% of the DOGE in circulation. / Source: Chainalysis.

On the other hand, of the 4 million entities that currently participate in the platform, 2.1 million have less than 100 DOGEs each. Half of them have owned the coin for more than two years.

Elon Musk’s push and the rise of DOGE scams

As stated in other research, Chainalysis reiterates that the demand and price of DOGE are often driven largely by social media.

A recent report by The TIE, provider of information services on digital assets, together with the eToro platform, confirms the high influence of tycoon Elon Musk on the price of the cryptocurrency meme. Chainalysis notes that there was indeed an increase in on-chain transactions at the same time that Dogecoin followers’ activity on social media grew, following the billionaire’s tweets.

However, this growing popularity has also had negative repercussions, as it implies greater use of DOGE for criminal activities, the study highlights.

We’ve seen several thefts and scams involving Dogecoin this year, including a giveaway scam that raised over $ 40,000 after they promoted a bogus initiative, allegedly led by Elon Musk, to pay users 10 times more for any cryptocurrency. sent to the fraudsters’ address.

This boom in DOGE scams is proof of the high interest in cryptocurrency and is another reason that the analytics firm uses to include it in its next blockchain evaluations.


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Disclaimer:

The information expressed in this article is solely those of the author and do not necessarily reflect the vies of CryptoDeFinance.  Each and every investment and trading move involves high risk. You should always conduct your own research when making a decision in crypto investment.
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Bruno Marques

Hi! I am the CEO/Founder of Crypto DeFinance, and I am an Enthusiast crypto investor. I started this project so we can provide you with carefully curated news. If you like us and our news, share the posts and comment. Your visit and interaction is very important to us.
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