The rise seen on the Dogecoin blockchain looks to be slowing down after a frenzy of activity that saw Dogecoin (DOGE) handle a bigger dollar value of daily transactions than Bitcoin (BTC) and Ether (ETH) combined.
Throughout 2021, the Dogecoin price surge has been followed by an equally absurd increase in the value of transactions on its network. On May 5, the dollar amount of DOGE transmitted from wallet to wallet reached $82 billion, surpassing the $35 billion recorded on Bitcoin and the $12 billion recorded on Ethereum.
Outperforming the world’s two most well-known blockchains is all the more remarkable since Dogecoin’s daily totals were as low as $10 million as recently as December 2020. Tesla CEO Elon Musk and the concerted efforts of social media traders intent on boosting Dogecoin in a way akin to the shares of gaming store GameStop attracted new eyes to Dogecoin in 2021.
While overall activity on Dogecoin is still considerably above December lows, a significant reversal was seen in May, suggesting that whales are growing tired of this meme token.
On Wednesday, Dogecoin handled just under $5 billion in daily transactions, down 93% from its all-time high of $82 billion earlier in the month.
Meanwhile, the average transaction value of DOGE plummeted from $1.16 million on Sunday to around $240,000 three days later on Wednesday, a reduction of about 80%. Despite entering via a far lower sample size, the coin’s huge average transaction value has maintained for much of the past month, indicating that Dogecoin was largely used by wealthy account holders.
Although the increase in activity on the Dogecoin blockchain happened in spurts throughout the year, the two indicators listed above saw significant rises in mid-April as traders attempted to artificially push the value of the altcoin in the run-up to 4/20 day.
The ensuing decline in network activity was matched by a 63% reduction in the Dogecoin price, which fell from its recent all-time high of $0.73, through the most of May.