Dogecoin was originally created as a "joke" several years ago to poke fun at bitcoin and the manic surge in cryptocurrencies.

But if you could turn back time, gambling on dogecoin would have been a quick way to get rich.

12 months ago, each of those "meme" coins was practically worthless (or 0.26 US cents to be precise).

It climbed to a record high of 69.6 US cents on Wednesday (which is a 26,647 per cent gain in the past year).

At the time of publication, it has since come down to about 60 US cents.

The total market value of dogecoin has surged to $100 billion ($US78b), meaning it's worth even more than Australia's second-largest bank (Westpac).

If you bought $US26 worth of #Dogecoin exactly one year ago -- it would be worth about $US6,075 right now.

Dogecoin (inspired by a Shiba Inu meme) is grabbing headlines again after its price jumped 600 per cent in the past few weeks.

That's despite a broad acceptance it has no "inherent use case" (a formal way of saying 'useless') – and very few businesses in the world accepting it as a form of payment.

'Dogefather' Musk

One analyst says the dogecoin bubble "should have popped by now".

He believes the reason for dogecoin's latest spike is Mr Musk, who will make his guest appearance on US television network NBC's Saturday Night Live [SNL] this weekend.

"Dogecoin is surging because many cryptocurrency traders do not want to miss out on any buzz that stems from Elon Musk's hosting of Saturday Night Live," said Oanda market analyst Edward Moya, based in New York.

"Also known as the Dogefather, Musk will undoubtedly have a sketch on cryptocurrencies that will probably go viral for days and further motivate his army of followers to try to send dogecoin to the moon."

Essentially, people are betting that the world's second-richest man will say something that drives up the price of dogecoin and they want to get in before that surge happens.

Mr Moya, who believes dogecoin has "no fundamentals" is calling it "the greatest bubble of our generation" (and he has seen plenty of them in his 20 years of trading experience).

'Easy trade' and bitcoin fatigue

"A lot of this recent surge is also due to the exhaustion with bitcoin," Mr Moya said.

While bitcoin enjoyed a phenomenal rise last year, its momentum has slowed down since mid-April, when it hit a record high ($US64,829).

The world's first cryptocurrency has shot up 99 per cent since the year began. But that's nothing compared to dogecoin's 13,000 per cent rise since New Year's Day.

Back in February, Mr Musk quipped that: "Arguably the most entertaining outcome, the most ironic outcome, would be that dogecoin becomes the currency of earth, of the future."

Along with his tongue-in-cheek tweets about sending its price "to the moon", a lot of dogecoin buyers are also 'in on the joke', and wanting to see how high they can drive it.

However, there are some who "have a belief instilled in their minds that dogecoin will take off", and Mr Moya is worried they will get burnt in the end.

"Since the pandemic started, a lot of these novice traders might have started off investing in Tesla, then the FAANG [Facebook, Amazon, Apple, Netflix, Google] stocks.

"They might have then joined the Reddit army and bid up GameStop – a lot of those traders are also behind dogecoin."

He also said a lot of traders are simply "following the momentum trade", in the belief dogecoin will soon rise towards one dollar (from its current level of 60 US cents)."

It's just another 'GameStop'

Mr Moya said he does "not anticipate this trend will continue".

He believes dogecoin will soon crash as "panic selling" creeps in, and inexperienced small-time investors will lose a lot of money – similar to the GameStop saga earlier this year.

Basically, it was the case of a struggling video game retailer which saw its share price surge up 1,915 per cent in less than a month, driven by enthusiastic Redditers on the r/WallStreetBets forum.

This social media army who saw an opportunity to make a quick profit – at the expense of Wall Street's hedge fund titans who were betting against the company.

Its shares leapt 1,915 per cent in less than a month. Then it lost most of those gains within weeks, as opportunistic traders decided to cash out early – and the 'last ones standing' (those still holding GameStop shares) suffered huge losses.

At the other end of the spectrum, he expects the biggest winners will be "the institutional world", or big financial institutions who have recently joined the party.

"They don't see it as a serious investment, but a perfect opportunity to capitalise on all this retail interest.

"A lot of money managers are seeing this as 'easy opportunity' to make money. They're going to ride this higher as they know retail investors will be the last ones to sell."

Given Mr Moya has identified this as an opportunity to "make a quick buck", we had to ask whether he felt tempted to join the dogecoin bandwagon."I own zero cryptocurrencies, and I've been covering this space since 2014," he replied without hesitation.

"I also discussed this with my wife. If we were ever to consider investing in crypto, we'd be willing to put in 0.5% of our income, at most.

"There are a lot of red flags right now. Not just with dogecoin, but the wider crypto world. You're going to keep seeing regulatory hurdles emerge.

"To believe that we'll see bitcoin and ethereum dominate the way it has , especially when the European Union, China and United States introduce their own digital currencies – I'm sceptical."

Story By | David Chau