Dogecoin, the cryptocurrency created as a spoof, hit a record Friday. Heading into the weekend, it had soared more than 400% in the past week and skyrocketed by more than 5,000% since the start of the year, further stoking concerns about a cryptocurrency bubble.
Robinhood briefly suffered a “major outage” last week in the midst of Dogecoin’s rally, angering many retail investors.
Over the weekend, Dogecoin fell from its record high after topping 44 cents on Friday to hit a low of 24 cents on Saturday, though has recovered some of its losses and is currently trading around 31 cents.
Bitcoin had already been under pressure in recent days. It fell more than 4% Friday after Turkey’s central bank banned the use of cryptocurrencies from the end of April, saying crypto payments came with “significant risks.” India is also reportedly set to propose a law banning cryptocurrencies, fining anyone trading in the country or holding such digital assets.
To be sure, more companies have started accepting the currency as an official payment option despite concerns about volatility in the cryptocurrency market. Investment banks like Morgan Stanley have offered some of the wealthiest clients access to Bitcoin funds.
In February, Tesla CEO Elon Musk said the electric-car company would accept bitcoins as a form of payment for all models of its cars in the U.S. Online payments company PayPal has also begun to accept Bitcoin as payment.
The euphoria surrounding Coinbase’s trading debut could trigger a short-term “buy the rumor, sell the event” type of reaction for investors, Edward Moya, senior market analyst at foreign-exchange trading service OANDA, said in a note.
“Buy the rumor, sell the news,” is a market adage based on the belief that an asset may rise in anticipation of rumors, then stagnate or fall when investors take profits after the news is released.