Elon Musk has anointed an heir to Dogecoin — and it’s called Baby Doge.
The billionaire Tesla CEO gave a shout-out to the month-old spinoff of the canine-themed cryptocurrency on Twitter Thursday morning, causing its price to more than double, according to CoinGecko data.
The Musk effect wore off shortly afterward. As of mid-day Friday, Baby Doge had fallen about 22 percent from its peak. But Baby Doge’s trading volume has been consistently high since Musk’s post, indicating the potential for sustained interest among crypto traders.
So what, apart from the fact that its name is piggybacking on Dogecoin, makes Baby Doge different?
Baby Doge is Dogecoin’s brand new ‘son’
Baby Doge — whose creators don’t appear to be affiliated with those who created Dogecoin as a joke in 2013 — features a mascot that looks like a puppy version of its “father,” the Shiba Inu dog that is the face of Dogecoin. It started trading in early June, after most of the original Dogecoin mania had worn off.
“Baby Doge is proud to run with his father and provide transparency and fairness to the community,” reads a website for the coin, which also says that Baby Doge has a market capitalization of $200 million.
More than 200,000 people purchased Baby Doge in the first month it was available, according to a Twitter account run by the coin’s creators. People who purchased Baby Doge on the first day it was available have reaped returns of about 500 percent, according to CoinGecko.
But the new crypto coin has also attracted its shares of skeptics, with one on Thursday branding it a “pyramid scheme” over the way its transactions distribute fees to early investors, shortchanging newcomers.
“The only way to make money on a token like this is to get in early – typically before Elon Musk tweets about it,” Logan Ross wrote on Benzinga.
Supply of Baby Doge is limited — unlike Dogecoin
While there is no limit on how many Dogecoins can theoretically be created through crypto mining, Baby Doge’s creators say their coin is “hyper-deflationary” — which, oddly, they say means supply of the coin is contracting rather than expanding.
The creators of the coin even said Thursday that they would execute a “coin burn” of 3 quadrillion Baby Doge coins, driving up the price of Baby Doge by reducing supply. Still, a single Baby Doge coin is currently worth just $0.000000001623.
Where can you buy baby dogecoin? Not on mainstream crypto trading sites
While mainstream crypto trading sites like CoinBase and WeBull offer Dogecoin, they do not let their users by Baby Doge.
However, interested crypto traders can buy Baby Doge through the crypto exchange Binance, which was banned from operating in Britain this week.
Baby Doge is not the only Dogecoin spinoff
Another cryptocurrency has also claimed to be Dogecoin’s successor.
Shiba Inu coin, which also features a dog mascot and pays homage to Dogecoin, has been purchased by about 550,000 people since it launched in August 2020. It is currently the 26th largest coin by market capitalization, according to CoinGecko.
Shiba Inu coin is also subject to wild fluctuations based on Elon Musk tweets.
When Musk tweeted, “My Shiba Inu will be named Floki,” in June, Shiba Inu coin’s price spiked about 10 percent.