Data Insights: Who is buying Dogecoin?

This article is from PANews.

"To the moon" is a saying in the community, meaning that the price of the coin will soar.

But the joke is about to become reality. In early April, Tesla CEO Elon Musk tweeted that he plans to send a DOGE (Dogecoin) to the moon with SpaceX. Following this, DOGE entered a rapid rise mode, breaking through $0.1 on April 14 and then reaching an all-time high of $0.43 on April 19, with the price skyrocketing by 336% in just one week. The 30-day return on investment surged from 113% to 587%, and its market capitalization ranking entered the top ten.

What notable changes in on-chain data of Dogecoin are worth paying attention to behind the popularity of DOGE? As a mimic coin of BTC, how is DOGE currently developing compared to BTC? Who is buying DOGE? What impact does social media heat have on the coin price? After analyzing this year's market data and on-chain data of DOGE, PAData found:

1) From the perspective of return performance, DOGE's rapid rise began in mid-April this year, with an overall price increase of over 7045% this year, while BTC only rose by 90% during the same period. The significant increase in DOGE caused its 30-day return rate to rise from 65% to 587%, peaking at 941%, reversing the previously moderate upward trend.

2) From the source of trading volume, the main buyers of DOGE in this round may come from domestic markets. The trading volumes of Binance, OKEx, and Huobi accounted for over 60% of DOGE's total trading volume, with the DOGE/USDT trading pair accounting for as much as 78% of the total trading volume, far exceeding the cumulative trading volume of DOGE with fiat pairs like TRY, USD, and EUR, which only accounted for 9%. Within the market covered by these three exchanges, the need for stablecoins as a trading medium is primarily in the domestic market, which may indicate that the main buyers of DOGE are domestic users.

3) From the on-chain data perspective, Dogecoin's on-chain activity has significantly increased this month. The average daily active addresses in April increased by 37.81% month-on-month, the average daily settlement amount increased by 1258.02%, and the average transaction fee per transaction increased 114 times.

4) From the media heat and DOGE's price trend, Twitter and Google search indices are positively correlated with the coin price trend over the past week, with the strongest correlation to the price on the same day. Especially in April, the number of tweets was strongly correlated with the price trend within a week, with the Pearson coefficient between the number of tweets and DOGE's price over different time periods exceeding 0.7.

5) The correlation between media heat and coin prices over different time periods did not show a trend of increasing or decreasing over time, which means that the impact of media heat on coin prices over different time periods has a certain randomness.

DOGE has risen 7000% this year,

with 80% of trading volume coming from stablecoin trading pairs.

Since the beginning of this year, DOGE has risen from $0.0057 on January 1 to $0.4073 on April 19, with an overall increase of an astonishing 7045.61%, far exceeding the 89.71% increase in BTC during the same period.

The rapid rise of DOGE actually began in April this year. According to statistics, since April, DOGE has soared from $0.062 to $0.407, an increase of about 557.04%. The largest single-day increase was on April 16, with a rise of 101.49%, when DOGE climbed from an opening price of $0.1816 to a closing price of $0.3659.

Affected by the rapid price increase, DOGE's 30-day return rate this year has changed from last year's relatively stable trend to a significant upward trend. According to statistics, last year, DOGE's 30-day return rate rose from -10.7% to 42.6%, with an overall increase of about 53 percentage points, and an annual average of about 7.3%, showing a steady upward trend throughout the year. This year, DOGE's 30-day return rate soared from 64.7% to 586.6%, with an overall increase of about 521 percentage points and an annual average of about 211.1%, showing a clear upward trend in annual return rates, but with significant volatility. In contrast, BTC's returns have been more stable, with a smaller fluctuation in the 30-day return rate, averaging about 11.7% last year and about 33.6% this year, only increasing by about 22 percentage points.

Where does the upward momentum of DOGE this year mainly come from? From the composition of DOGE's secondary market trading volume, the main funds may come from domestic markets. According to the distribution of DOGE trading volume on exchanges, currently, Binance, OKEx, and Huobi Global are the three major trading markets, with trading volumes accounting for 34.64%, 14.19%, and 11.38% respectively, totaling about 60.21%. If we include the trading volumes from exchanges like ZB.COM, Gate.io, Kucoin, FTX, Biki, and MXC.COM, the trading volume from these exchanges, which are mainly used by domestic users, will account for a cumulative 68.53% of DOGE's total trading volume.

Additionally, from the perspective of the trading volume proportion of DOGE's main trading pairs, currently, the trading volume of DOGE/USDT accounts for about 78.65%. If we include the trading volumes of DOGE with BUSD, HUSD, and USDC, the total trading volume of DOGE with stablecoin trading pairs will exceed 80%. In contrast, the trading volume of DOGE with fiat pairs like USD and EUR only accounts for about 9%. Within the market covered by Binance, OKEx, and Huobi Global, the need for stablecoins as a trading medium is primarily in the domestic market, which may also indicate that the main buyers of DOGE are domestic users.

The number of daily active addresses for DOGE increased by 38%,

and the average monthly settlement amount increased by 1258%.

Driven by DOGE's strong market performance, the on-chain activity of the underlying network, Dogecoin, has also seen a comprehensive and significant increase.

In terms of user scale, the average daily active addresses for Dogecoin in April exceeded 100,000, reaching about 124,900, which is about 1/9 of the average daily active addresses on the Bitcoin network during the same period. Although there is still a significant gap in the absolute number of active addresses between Dogecoin and Bitcoin, unlike the steady decline in the average daily active addresses on the Bitcoin network this year, Dogecoin's daily active addresses have shown rapid growth, with the average daily active addresses in April increasing by 37.81% compared to the previous month.

Compared to the number of active addresses, the increase in the number of daily on-chain transactions for Dogecoin is even more pronounced. According to statistics, the number of on-chain transactions for Dogecoin has risen from 34,600 at the beginning of the year to 70,900 currently, with an overall increase of about 104.91%. The increase in April was about 51.92%. In contrast, the number of daily on-chain transactions for Bitcoin decreased from 261,300 to 207,300, with an overall decline of about 20.67%.

If we consider the ratio of monthly average active addresses to daily transaction counts, we can see that this year, the number of transactions per 10,000 active addresses for Dogecoin has slightly increased from 4,210.53 to 4,467.57, an increase of about 6.10%. In contrast, the number of transactions per 10,000 active addresses for Bitcoin has slightly decreased from 2,836.81 to 2,559.02, a decline of about 9.79%. Overall, the activity of active addresses in both networks has remained relatively stable, but the activity of Dogecoin's active addresses has slightly increased.

Another point worth noting is that recently, the total on-chain settlement amount for Dogecoin has exceeded that of Bitcoin multiple times. For example, on April 16, 17, and 19, the total on-chain settlement amounts for Dogecoin were approximately $64.92 billion, $22.93 billion, and $47.73 billion, while the corresponding amounts for Bitcoin were approximately $50.98 billion, $20.96 billion, and $27.87 billion.

Dogecoin's average monthly on-chain settlement amount has seen significant growth this year, although this may be temporary. According to statistics, in April this year, Dogecoin's average daily on-chain settlement amount was approximately $11 billion, an increase of 1258.02% compared to the average in March, equivalent to a 13.5-fold increase. In the same period, Bitcoin's growth was 24.96%.

The active on-chain trading activity has also increased the income of Dogecoin miners. This year, Dogecoin's transaction fees have reached $999,200, with the total fees generated in April alone reaching $563,000, exceeding the total of the previous three months. The peak daily transaction fee occurred on April 16, when the fees reached $187,000, accounting for about 18.71% of the total fees for the year.

In terms of the average transaction fee per transaction, this year, Dogecoin's daily transaction fee has risen from $0.0056 at the beginning of the year to $0.64 currently, an increase of 11,350%, equivalent to a 114-fold increase. In the same period, Bitcoin's daily transaction fee rose from $1.83 to $26.74, an increase of about 1361.20%, equivalent to a 14-fold increase. If DOGE continues to maintain its rapid upward momentum, it is possible that more computing power will participate in Dogecoin mining in the future, which may reduce transaction fees.

This month, the number of related tweets about DOGE exceeded 400,000,

with social heat strongly correlated to the coin price over the week.

Many believe that DOGE's surge this year is related to Tesla CEO Elon Musk's repeated "shouting" on Twitter. So, to what extent does the spread of Dogecoin on social media platforms and online spaces affect the actual price of DOGE?

Late January and mid-April were two peak periods for the number of #Dogecoin tweets, with January 29 seeing the number of tweets with the #Dogecoin topic peak at 967,100, about 4.8 times the number of tweets with the #Bitcoin topic during the same period.

According to the correlation statistics between the number of tweets and DOGE prices over different time periods, the number of tweets is positively correlated with DOGE's price, meaning that the more tweets there are and the higher the social media heat, the higher the price of DOGE. The correlation is strongest between the number of tweets and DOGE's price on the same day, with an average Pearson coefficient of about 0.63 over the first four months, followed by a relatively high correlation with the average price of DOGE over the next seven days, with an average Pearson coefficient of about 0.60. This indicates that the more tweets there are, the higher the price of DOGE on that day, and the higher the average price over the following week.

It is important to note that the correlation between the number of tweets and coin prices over different time periods did not show a trend of increasing or decreasing over time, which means that the number of tweets has a certain randomness in its impact on coin prices over different time periods. For example, in February, the impact of the number of tweets on the price of the day was minimal, but over time, this impact increased. However, in April, the number of tweets had a significant impact on the price of the day and the prices over the next three days, while its impact on the prices over the other two time periods decreased.

From a broader perspective of online dissemination, the positive correlation between media heat and DOGE still exists. According to the Google search index, like Twitter, late January and mid-April were also two peak periods for Dogecoin's Google search index. On April 16, Dogecoin's Google search index was approximately 173.3, while Bitcoin's search index was about 178.8, with both being very close.

According to the correlation statistics between the search index and DOGE prices over different time periods, the search index is positively correlated with DOGE's price, meaning that the higher the search index and online dissemination heat, the higher the price of DOGE. The correlation is strongest between the search index and DOGE's price on the same day, with an average Pearson coefficient of about 0.74 over the first four months, significantly higher than the correlation with the prices over the other three time periods, which are around 0.60. This indicates that the more Google searches there are, the higher the price of DOGE on that day. Moreover, the search index has a greater correlation with DOGE's price on the day than the number of tweets.

However, the correlation between the Google search index and coin prices over different time periods also has a certain randomness. For example, in March, the Google search index had the greatest correlation with the price the following day, while in April, the search index had the greatest correlation with the price on the same day.

"Is Dogecoin (DOGE) worth holding long-term?" has become a hot topic on Weibo after DOGE's surge. Under this topic, the 21st Century Business Herald initiated a poll on whether it is worth holding DOGE long-term. Currently, among 11,000 people, 4,437 believe it is not worth holding long-term, accounting for about 40.37%, while 3,771 believe it is worth holding long-term, accounting for about 34.28%. Dogecoin was born from a joke, but whether it should still be treated as a joke in the future remains to be seen.