According to the most recent Chainalysis report, published on August 13, the number of investors interested in dogecoin (DOGE) has increased 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. A figure that shows how the number of users has tripled in a year.
This report is the first that Chainalysis publishes on Dogecoin, after having announced, this week, its decision to include the cryptocurrency in the market studies that 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.
Its calculations They estimate that there are currently about 4 million dogecoin holders on the chain (outside exchanges and custody services), with an average of 32,000 daily active users so far 2021.
As can be seen in the following graph, the growth of investors has been correlated with the rise in price of DOGE, which went from USD 0.005 in January to USD 0.304 in August:
For this reason, «DOGE has become the new currency most frequently requested by our clients in both the public and private sectors who want to improve compliance when dealing with this new asset “, says Chainalysis.
The study recounts the history of Dogecoin, created at the end of 2013 from the meme of a purebred dog Shiba Inu, called Kabosu.
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, maintained 30% of the supply 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 most significant increase in the number of Investors started in 2020, but skyrocketed throughout 2021. A rise that began to attract media attention in January at the hands of the billionaire owner of Tesla, Elon Musk, and Reddit users, who contributed to raising the price.
The figures also indicate that investors who acquired dogecoins in the last six months now own 25% of the offer . This, while those who have held the cryptocurrency for more than two years reduce their participation , going from 30% in July 2020 to 20 % nowadays.
The DOGE blockchain is highly concentrated
The Chainalysis report also points out that -despite the constant increase in the number of investors- the platform is highly concentrated. A characteristic already pointed out by the Coin Metrics analysts last February, as reported by CriptoNoticias.
It is thus explained that 82% of the crypto asset supply, about 106,000 million of the total of 130,000 million of DOGE, are in the hands of 535 entities. Each one owns more than 10 million dogecoins.
37 billion of the 106 1 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 1 billion DOGE each on average.
Chainalysis.
It is then a very small number of entities, as revealed by the Chainalysis study, consisting mainly of Retail exchanges or early investors characterized by few withdrawals on the blockchain.
«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.
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 currency for more than two years.
As other studies have stated , Chainalysis reiterates that the demand and price of DOGE are usually driven largely by social media.
Even a recent report by The TIE, provider of information services on digital assets and the eToro platform confirms the high influence of tycoon Elon Musk on the price of the cryptocurrency meme. Indeed, Chainalysis observes an increase in chain activity around the activity of dogecoin followers on social networks.
However, this growing popularity has also had negative repercussions, since it implies increased use of DOGE for criminal activities , the study highlights.
“We have seen several thefts and scams involving Dogecoin this year, including a scam of giveaway 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 scammers’ address. ”
This boom in DOGE scams is proof of the growing interest it arouses, and is another reason the analytics firm uses to include it in its next blockchain evaluations.
