Much institutionalization? Dogecoin's surge has been fueled by more than just retail traders

Dogecoin — the meme-themed cryptocurrency — has surged in price since the beginning of the year thanks to legions of retail traders on Robinhood and other platforms. 

But now, it looks like even professional and institutional traders are getting in on the action.

The price of the dogecoin, hyped as of late by the likes of billionaires Mark Cuban and Elon Musk — soared from $0.06 earlier this month to around $0.40 on Monday. The crypto, which was originally created as a joke, now has a market capitalization that competes with those of Credit Suisse and Barclays. 

Market observers speculate that the same kind of retail and internet-based dynamics (read: memes) that have driven up the share price in stocks like GameStop are behind dogecoin's rise. Most recently, fans have been cheering for the coin to hit $0.69 on April 20, which would couple two well-known numeric memes.

It shouldn't be forgotten, however, that some hedge funds also made money investing in so-called meme stocks like GameStop. A February report in the Wall Street Journal revealed that Senvest Management was one fund that registered gains from their ownership of shares in the gaming retailer. 

Institutions want in on the doge action as well, according to trading firm executives. Aya Kantorovich, head of institutional coverage at FalconX, said the firm is increasingly hearing about "institutions rallying" into dogecoin. 

Wintermute, among the few market-making and over-the-counter trading firms active in the dogecoin market, has seen multi-million-unit dogecoin trades come in. "Biggest one we saw was 3 million DOGE," founder Evgeny Gaevoy said. That's about $1.2 million at current prices. 

Still, many large crypto trading firms have remained on the sidelines. B2C2 and Blockchain.com, which both operate over-the-counter trading operations, are not executing dogecoin trades. Genesis has explored the possibility of executing dogecoin trades but also doesn't touch it at present.

SFOX, a crypto broker, has seen demand for dogecoin from its active trader client base increase, though many interested clients aren't yet ready to invest in the meme coin. "We've spoken to a number of current and interested clients that expressed their interest in doge's volatility and that liquidity and accessibility was a concern," said Danny Kim, head of revenue at the firm. 

Alameda, an Asia-based market-making firm affiliated with crypto venue FTX, is another player in the dogecoin market, according to CEO Sam Bankman-Fried. The former Jane Street trader told The Block that the firm has seen some one-off demand from large traders and that, in general, dogecoin has seen "steady demand."

Still, Alameda hasn't seen orders come in larger than $1 million. Bankman-Fried said dogecoin trading is still mostly taking place on retail exchanges.

"It was the most traded asset on FTX one day and is often the most traded asset on (FTX-owned) Blockfolio," he said. 

It's a similar story for rival Binance, according to data compiled by The Block. Year-to-date, the exchange has clocked in more than $58 billion in dogecoin volumes. On an average day, the firm sees volumes for dogecoin hit $540 million.