Elon Musk's support for Dogecoin

Dogecoin and The Musk Hype: The Rise, The Fall. The Rise?

-John ‘Dare Okafor

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In recent years, we have witnessed — with an interesting rapidity — the rise of cryptocurrencies around the world. From the look of things, it has come to stay and is already evolving as a digital medium of exchange. According to Investopedia, cryptocurrency is a digital or virtual currency that is secured by cryptography (derived from encryption), which makes impossible to counterfeit or double-spend.

The first blockchain-based cryptocurrency was Bitcoin, which remains the most popular and valuable. Today, there are thousands of alternate cryptocurrencies with various functions and specifications. Some of these are clones of Bitcoin, while others are new currencies that inventors built from the scratch, like Dogecoin. Dogecoin was an offshoot of Luckycoin, which was also a fork of Litecoin.

Dogecoin started as a joke cryptocurrency, but it now has a market capitalization of $7 billion and a huge global following. Dogecoin was a parody cryptocurrency created by Adobe Product Marketing Manager, Jackson Palmer and software engineer, Billy Markus in late 2013. They wanted to make the project ‘’as ridiculous as possible’’, and centred it on a popular internet meme of Japanese Shiba Inu ‘’doge’’ that would say nonsensical phrases like ‘’much wow’’ and ‘’such tired’’.

Another major contributor to Dogecoin’s global popularity in more recent years is its growing list of influential celebrity-endorsers who frequently voice their support for Dogecoin. The most notable celebrity endorser of Dogecoin, however, is none other than Tesla CEO, Elon Musk. Musk first came in contact with Doge in September 2018 when he publicly enlisted the help of former Dogecoin creator, Jackson Palmer, to combat Twitter fraud bots that were impersonating Musk to steal people’s crypto.

In March 2020, Musk followed up with another Doge-related tweet stating, ‘’Dogs rock…they have the best coins’’, and four months later, he shared a Dogecoin meme to his 46. 9 million Twitter followers with the caption ‘’It’s inevitable’’. Towards the end of 2020, Musk continued tweeting about Doge — causing prices to pump by 25% on 20th December after he posted ‘’DOGE’’. He even jokingly commented that Dogecoin could one day become the official currency of Mars.

During the WallStreetBets stock markets in January 2021, Musk sent Dogecoin prices soaring 800% towards a new all-time high $0.08 after tweeting an image of a dog on the cover of a ‘’Dogue” magazine. On the 10th of February, Musk claimed that he bought Dogecoin for his son, Lil X, surging Altcoin’s prices by 16 percent.

Dogecoin cryptocurrency has surged over the last month, climbing to a staggering $10 billion total value. However, the Dogecoin price has fallen by almost half since its February peak, despite regular Dogecoin tweets by Elon Musk. Elon tweeted the ‘’Doge meme shield (legendary item)’’ last week, alongside an image depicting Dogecoin being protected from its ‘’value dropping’’. It didn’t do much influencing the Dogecoin price.

Meanwhile, reports have it that that the U.S. regulators are investigating Musk for his Dogecoin-boosting posts. Some weeks ago, financial newswire, First Squawk, reported that the Securities and Exchange Commission was investigating Musk’s Dogecoin tweets.

Why do the Tesla boss’ tweets mean so much to the spike, or otherwise, of Dogecoin? Could it be because Elon Musk has recently taken the highest seat on the list of the world’s richest men? It could be partially due to this, but not fully. The surge in Dogecoin’s value, based on Elon Musk’s tweets, has more to do with Elon’s personality that people have come to know him by. Elon is a disruptor — a man who’s defied social odds and conventional claims to found a highly successful company way ahead of its time. It is this perception of Elon Musk that pushes drives his cult following, which easily allowed for a surge in the prices when Elon Musk showed support for the coin.

In Musk, people see an insightful technological prophet, so, it’s easier to align with whatever Musk supports. Given this perception of Musk, what then is the future hope of Dogecoin which has seen a rise, and then a fall. Will it experience yet another spike in its value? Will it degenerate further? Will it remain stagnant? Will it…?

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