Crypto News

Data Shows Dogecoin Pump Was Driven By Robinhood Buyers

Last week, Dogecoin exploded with an 800% intraday move. On-chain data looking closely at daily active addresses, however, suggests that the pump and dump was almost entirely driven by Robinhood buyers.

Here’s what this means for both sides of the coin.

Dogecoin Reignites Retail Interest in Crypto After 800% Rally

Dogecoin’s recent rally lived up to its “much wow” catchphrase, climbing 800% from under a penny to more than 6 cents per token.

Dogecoin became the target of a group of organized buyers after shares of GameStop and other stocks were restricted from trading last week. With those stocks unable to trade, the trend turned toward cryptocurrencies.

Related Reading | Altcoin Season Is Here: “Buy Crypto” Surpases Bitcoin Searches On Google

The meme-based altcoin was an easy choice for the organizers who range from Redditors to Tik Tok content creators, mostly because of its low price and adorable pup logo.

dogecoin robinhood reddit bitcoin crypto

Doge pumped over 800% in a single day | Source: DOGEUSD on TradingView.com

Fundamentally Flawed: Why Buying Altcoins On Robinhood Is The Wrong Idea

Even though investors piled into Dogecoin en masse, pumping its price, daily active addresses failed to set a new high, according to CoinMetrics.

This data suggests that the pump was driven primarily by Robinhood investors, as new users on proper crypto platforms would have resulted in new address creation.

dogecoin robinhood reddit bitcoin crypto

Daily active addresses climbed but failed to set a new high | Source: CoinMetrics on Twitter

Robinhood gained popularity over the last several years by offering retail investors quick and easy exposure of top traded company shares through a sleek user interface.

The platform introduced cryptocurrencies in 2018, but Robinhood doesn’t work the same way as most cryptocurrency exchanges. Any cryptocurrencies bought on Robinhood cannot be moved to and from the platform, meaning users don’t actually own the crypto.

On-chain data shows a lack of a corresponding spike of new addresses that matches the growth in price. The lack of fundamental growth in the meme-coin likely means that any price increase from organized pumps won’t be sustainable. However, the rally was enough potentially to ignite altcoin season in the crypto space.

Related Reading | Robinhood Reminder: Not Your Keys, Not Your Bitcoin

Dogecoin in the past has been used successfully as a barometer of sentiment in altcoins, and its emergence is a sign to take positions in coins with more utility and value.

Coinciding with all of this, Google searches for “buy crypto” have begun to outweigh “buy Bitcoin.” Those who do end up buying more crypto due to the allure of Dogecoin-like gains, should do so from a platform that allows you to self-custody the assets such as Coinbase.

Featured image from Deposit Photos, Charts from TradingView.com

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Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of CoinChapter and CoinChapter does not assume any responsibility or liability for the same.

(This story has not been edited by CoinChapter staff and is auto-generated from a syndicated feed.)
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Founded in 2015, Coinchapter.com has become one of the leading resources for the crypto asset community. Created by a small group of cryptocurrency enthusiasts, Coinchapter.com was built to provide new members of the crypto asset community with unbiased listings of cryptocurrency exchanges and retail options that would allow them to buy the crypto assets that they wanted, how they wanted and at the price they wanted.

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