So this is how mass adoption happens? Elon Musk, at least at one point the world’s richest man, replaced Twitter’s classic blue bird logo with a sprite of DOGE, the Shiba Inu dog known as much for the meme as the meme coin. Dogecoin spiked something like 40%, and hasn’t yet crashed. I hear there’s excitement brewing that DOGE could pump above the 10 cents threshold, which is proportionately one-tenth as exciting as when the so-called proletariat investors of the GameStop era attempted to drive dogecoin, sometimes un-ironically called “the people’s cryptocurrency,” past $1 (it didn’t work).
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Dogecoin is apparently spiking because people believe that Elon Musk could soon integrate a permanent dogecoin payment system on Twitter, the microblogging platform he overpaid for ($43 billion). Twitter has several million daily active users, many of them high-profile, and if even just a small percentage begin transacting in DOGE – as a joke or not – it’s not completely irrational to speculate on that translating into a higher price. Mind you, Twitter already has payment/tipping features using the U.S. dollar and the Bitcoin Lightning network. The latter is rarely used, which gives some indication of how frequently the even-less-widely adopted and even-less-trusted crypto, dogecoin, would (or wouldn’t) be used.
Of course, this is my attempt to ascribe meaning to crypto price moves. Prices are basically the only thing that matter in crypto, but rarely for any reason investors typically rely on when evaluating the expected return of an asset. Instead, crypto prices are almost a perfect reflection of market sentiment – or, to put it in the people’s language, vibe. The coronavirus shutting down the global economy? Bad vibes. Locked-down workers with excess cash turning into slap-happy day traders? Fun vibes. A massive stablecoin experiment crashing and burning? Bad vibes. The collapse of the U.S. banking revealing Bitcoin’s virtues? Apparently good vibes.
Elon Musk has manipulated the price of dogecoin in the past. The first time it happened, in early 2020, DOGE jumped after the Tesla founder tweeted out a meme. He apparently got a taste of something he enjoys – power through s**tposting – because he pulled similar moves again and again, each time raising the stakes as the joke grew stale. He weighed in on a dispute between DOGE traders and crypto exchange Binance. Tesla, his car company, would allow DOGE payments. Musk planned to bring DOGE to space, with a SpaceX satellite launch. Over 30-some tweets up to the end of 2022, Musk pumped the price of DOGE by 4.5% on average, according to crypto-skeptical news site Protos.
There’s speculation Musk may be a massive DOGE holder, though it’s unknown how much, if any, he owns. Investors in New York actually filed a racketeering lawsuit against Musk alleging he purposely drove up the price of DOGE by 36,000% (the evidence being his tweets and a "Saturday Night Live" appearance as host) only to short the crypto when it inevitably collapsed. On March 31, Musk’s lawyers asked to throw out the suit, saying his statements were too vague to be considered fraud.
Dogecoin began as a joke, and has been denounced by one of its co-founders. Development on the project was stalled basically for years before people noted its out-of-date code base put users at risk. Riding the wave of a price jump, and Musk’s support, developers announced they were actually going to not only fix Dogecoin but revamp it, ultimately transitioning the network to proof-of-stake like Ethereum to position it as a genuine payment system for the web. Dogecoin developers have hinted that Chief Twit Musk even sat in on development calls as the Top Doge, and Musk has said the network has unique capabilities for micropayments.
Whether a working codebase and the support of one of the world’s most influential people is enough to propel DOGE into the hands of everyone remains to be seen. Of course, the vibes for crypto are way off since the collapse of the FTX exchange. And most of the “chattering class” is sick of Musk because of the media saturation, especially now that Twitter’s internal chaos spills out into the news nearly every week. Musk’s scatterbrained leadership at Twitter has even weakened support among his base of TSLA stock owners and space nerds, showing that Musk’s brand of creative-destruction may actually just be destructive.