The rise witnessed on the Dogecoin blockchain looks to be slowing down after a frenzy of activity that saw Dogecoin (DOGE) handle a bigger dollar worth of daily transactions than Bitcoin (BTC) and Ether (ETH) combined.
Throughout 2021, Dogecoin’s price surge has been followed by an equally absurd growth 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 focused on boosting Dogecoin in a way akin to the shares of game 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 Dogecoin.
On Wednesday, Dogecoin handled just under $5 billion in daily transactions, down 93 percent from its all-time high of $82 billion earlier in the month.
Conversely, 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 through a far lower sample size, the coin’s huge average transaction value has maintained for most of the last month, indicating that Dogecoin was largely used by wealthy account holders.
Although the rise 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 Dogecoin in the run-up to 4/20 day.
The ensuing decline in network activity was matched by a 63 percent reduction in the Dogecoin price, which plummeted from its previous all-time high of $0.73, for the majority of May.