Bitcoin and ethereum on Tuesday extended price declines that began last week, while Dogecoin maintained its rally on what supporters have dubbed ‘DogeDay’.
Both cryptocurrencies have come under selling pressure in the wake of Coinbase's (COIN) hotly anticipated IPO. Last week, Coinbase became the first major crypto firm to list on the Nasdaq (^IXIC). Bitcoin's price neared $65,000 ahead of the listing but has sold-off sharply since the debut.
Over the weekend, alarm bells sounded in crypto markets amid reports that the US Treasury was planning to censure financial institutions for money laundering carried out through digital assets. Regulatory action in Turkey has also hit sentiment.
Watch: What is bitcoin?
Dogecoin (DOGE-USD), meanwhile, was up 18% to $0.4075 on Tuesday. The surge coincided with a flurry of social media attention around what fans of the cryptocurrency have called 'DogeDay'.
It is unclear exactly why supporters have decided 20 April, which is also International Weed Day, will be celebrated as ‘DogeDay’, but posts on sites like Twitter and Reddit are urging fans to buy up the joke token and push its price up to $1.
Credit could go to Slim Jim, a report in Fortune explained.
"The packaged meat product latched on to Dogecoin-mania on its Twitter account last Wednesday (saying 'RT to send Doge to the moon!!'—the rallying cry among the r/WallStreetBets crowd for GameStop stock). The cry worked. Doge fans—and even other brands—jumped on the bandwagon quickly," the publication said.
Dogecoin has soared more than 400% in the past week and by more than 5,000% since the start of the year. The rally has made the joke token the fifth most valuable cryptocurrency by market capitalisation. The total value of tokens in circulation is now over $52bn.
Nigel Green, CEO of financial advisory organisation deVere Group, said: "Dogecoin has become the new GameStop, with frenzied trading potentially going to deliver a bloody nose to novice investors.
“This week, since Reddit lifted its ban on the discussion of three cryptocurrencies... activist investors and also some celebrity investors on social media have been urging others to invest their cash into Dogecoin – their new pet populist bandwagon.
“In the same way that the GameStop frenzy was pitched as a battle-play of ‘Wall Street versus The Little Guy’, Dogecoin is being pitched as a battle-play against the well-established crypto giants like bitcoin."
Watch: What are the risks of investing in cryptocurrency?