Dogecoin spiked 30% after Elon Musk said on Thursday that he might accept it as a payment method for Tesla. That followed his announcement on Wednesday that he’d stop allowing bitcoin payments for Tesla products over environmental concerns.
Dogecoin had risen by 30.2%, to $0.54, as of 8:20 a.m. on Friday in New York, according to CoinBase. It initially jumped on Thursday evening after Musk tweeted about considering the cryptocurrency as a payment method for Tesla.
“Working with Doge devs to improve system transaction efficiency,” he said. “Potentially promising.”
Dogecoin is the fourth-largest cryptocurrency by market capitalization. After Musk’s tweet, the value of the dogecoin market rose by over $10 billion, to about $67 billion, as trading volume accelerated.
The token, which started as a joke in 2013 and is often described as a “meme coin,” has rallied since early April, reaching a record high of $0.731578 on May 8. It has made year-on-year gains of 20,987.6%.
Musk said he’d look into more environmentally friendly cryptocurrencies to use instead of bitcoin. He said that while he believed in crypto, he was concerned about fossil fuels used in mining.
On top of dogecoin, Musk could explore cryptocurrencies including ether, Cardano’s ADA, XRP, and chia, all of which have a smaller environmental footprint than bitcoin.
Researchers and the crypto community are divided on bitcoin’s environmental impact. Cathie Wood’s Ark Invest published research on Thursday arguing that bitcoin mining actually helped the environment, whereas Bank of America said earlier this year that bitcoin used more energy in a year than American Airlines.
Tesla shares were up by 1.98% in premarket trading on Friday.
Dogecoin investors eagerly awaited Elon Musk’s Saturday Night Live skit last week, expecting his remarks to send the meme-coin to new highs.
Quite the opposite happened. Not only did the cryptocurrency tank 30% over the weekend, but the Dogecoin community was led on by con artists attempting to trick them out of their holdings.
A report published by blockchain intelligence provider TRM Labs detailed how the fraudsters manipulated Musk’s promotion of the digital currency, pocketing dogecoin worth $5 million at the time of the scam.
Here’s how the scam worked:
During the SNL telecast, viewers who searched for “Elon Musk SNL” on YouTube could see multiple livestreams that seemed to be hosted by the NBC show. They were actually being run by scammers.
The livestreams publicized links to unique websites that viewers could visit to receive dogecoin.
A message carried on the broadcasts read: “Elon Musk has devoted 500,000,000 DOGE to be distributed to all DOGE holders. Anybody can get some, just visit the website.”
This was perhaps somewhat believable as his followers expected the billionaire’s SNL hosting would pump the digital asset.
Users were asked to transfer dogecoin to a specified blockchain address with the assurance that they would receive double the amount sent.
As of May 9, the report showed scammer addresses received about 9.7 million dogecoin worth $5 million at the time. Initial findings noted most inflows were sent to the wallets by the owners themselves, falsely creating the illusion that they were legitimate accounts.
Most of these videos were taken down on Sunday in an attempt to cover any tracks.
One victim that fell for the scam warned others on the Dogecoin subreddit, saying: “Don’t fall for it like I did. The website won’t send you back twice the amount of coins you send them. I just went from having savings for this first time in my life to 60 bucks left in my pocket.”
“Giveaway scams are not new,” TRM Labs said. “According to the FBI, Mass Marketing Fraud schemes – like crypto giveaway scams – ‘victimize millions of Americans each year and generate losses in the hundreds of millions of dollars.'”
Dogecoin rebounds after Musk hints Tesla could accept it as payment
The digital asset recouped some losses by climbing as much as 20% to 55 cents on Tuesday. Musk ran a poll asking his followers whether they wanted his electric-vehicle maker to accept dogecoin as payment.
Most respondents said “Yes,” while about 20% didn’t think it was a good idea.
“As much of the value in Doge is speculative or perception driven, Elon seems to have anointed Doge as the de facto cryptocurrency with what seems to be a half-humorous, half-financial decision,” Edozié Izegbu, founder and managing director of digital-art for crypto platform Chimera, said. “The real question to be wary of is how long can this joke last.”
The meme-inspired cryptocurrency is up more than 11,000% so far this year, while bitcoin is up 90%.
SpaceX is launching a mission to the moon in 2022, and has accepted meme cryptocurrency dogecoin as payment to take a payload on the journey.
Geometric Energy Corp, an intellectual property, manufacturing and logistics firm, said on Sunday it had paid Elon Musk’s space company in dogecoin to take a kind of mini space-exploration satellite on the mission.
The mission will be called “DOGE-1 to the Moon”. Geometric Space Corp will collaborate with SpaceX to launch a 40kg satellite on a Falcon 9 rocket in the first quarter of 2022.
Musk tweeted: “SpaceX launching satellite Doge-1 to the moon next year. Mission paid for in Doge. 1st crypto in space. 1st meme in space. To the mooooonnn!!”
The token is up more than 20,000% over the last year, according to CoinGecko, despite falling sharply at the weekend. It has been boosted by Musk and other celebrities and has captured the imagination of cryptocurrency enthusiasts.
Analysts said a key driver of the red-hot rally in recent days was Musk’s upcoming performance on “Saturday Night Live.” Many commentators said he could further drive up dogecoin by singing its praises on national TV.
Geometric did not reveal in its statement how much dogecoin it had paid SpaceX as part of the deal.
“Having officially transacted with DOGE for a deal of this magnitude, Geometric Energy Corporation and SpaceX have solidified DOGE as a unit of account for lunar business in the space sector,” Geometric Energy’s chief executive officer Samuel Reid said.
Many regulators have warned cryptocurrencies are highly risky and could plummet to zero. But many analysts have made even stronger warnings about dogecoin, saying the joke token has no use cases and is pure speculation.
Dogecoin recovered some losses on Monday, after Elon Musk announced his SpaceX company will launch the satellite “DOGE-1 Mission to the Moon” next year.
Musk’s commercial-rocket firm will take off on a moon mission in 2022 carrying a mini-satellite used for space research from Geometric Energy Corporation, paid for entirely in dogecoin.
“Having officially transacted with DOGE for a deal of this magnitude, Geometric Energy Corporation and SpaceX have solidified DOGE as a unit of account for lunar business in the space sector,” Samuel Reid, Geometric Energy’s CEO, said in a statement.
The Tesla boss had previously hinted at these plans in a tweet on April Fool’s day, when he said SpaceX plans to put “a literal dogecoin on the literal moon.” That prompted a near-30% spike in its price.
Cryptocurrencies had another volatile weekend thanks to Elon Musk, according to Jeffrey Halley, a senior market analyst at OANDA. “Dogecoin, or as I call it, Pumpanddumpandpumpcoin, enjoyed a 40% range,” he said.
“Having risen on Friday after a Musk tweet with a dog, it fell when he called dogecoin a hustle in a skit on Saturday Night Live, which he hustled. Musk announced he was sending a satellite to the moon, much like Pumpanddumpandpumpcoin’s price action, next year in another tweet today. Dogecoin will likely follow suit,” he added.
The meme coin’s price rebounded by 3% to 55 cents, after trading around 47 cents on Sunday, according to Coinmarketcap data. But it again slipped to around 53 cents in early European trading. It is currently the fourth-most valuable among all cryptocurrencies, with a market cap of $70 billion.
Dogecoin has been swept up in a crypto-buying mania that has seen its biggest advocate, Elon Musk, boost its price. Several online brokerages including Gemini and eToro have added the meme coin to their offerings, causing investors to flock in even greater numbers to the hot new crypto listing.
A recent study conducted by GamblersPick showed more than one in four people believe “dogecoin is the future,” and the same ratio expect it to hit $1 per coin sometime in 2021, from around $0.61 currently.
Most survey respondents said they wanted Amazon to accept dogecoin as payment. At the same time, about 41% said they didn’t want any retail stores to accept the joke-based currency. About one-third said they believe it’s the “next bitcoin,” showing that a vast majority don’t actually think it can overtake the most popular cryptocurrency.
Amazon is reportedly expected to launch a digital currency that can be used on its own platform and marketplaces. The study showed that 64% of respondents would invest in such a currency if it were to be released.
Billionaire Elon Musk’s touting of dogecoin was initially met with concerns about whether his support is genuine, or a degree of fooling around. He recently said although the coin’s origins are awash with humor, it could become the future of cryptocurrencies. The Tesla boss has, however, said it would be “unwise” to invest too much.
But most survey respondents said they either approved of, or didn’t care about, Musk’s dogecoin-related promotions.
On average, dogecoin investors expect to invest $227 in dogecoin in 2021. But if the currency hits $1 this year, that investment could be worth quite a lot as it is currently trading around $0.61 per coin. It is already up 12,000% year-to-date.
The survey showed about half of the 1,001 respondents in the US regretted investing in Reddit-hyped stocks, while 40% rued their dogecoin investments.
“Dogecoin’s price rise demonstrates that cryptocurrencies are experiments in branding for financial assets, plugged directly into the craziness and creativity of the internet,” Philip Gradwell, chief economist at Chainalysis, said. “Dogecoin is a ‘self-aware’ meme. Its price is a function of how much attention dogecoin gets, which is currently a lot. There is a positive feedback loop: the higher the price, the more attention, the higher the price, and so on.”
More than 50% said they invested in dogecoin because they viewed it as an opportunity to get rich, rather than getting in for fun.
Ultimately it remains a bit like a game of chicken, according to David Kimberley, analyst at Freetrade. “People will want to hold on for as long as possible before dumping what they have and cashing out,” he said. “And you don’t want to be the one left asking ‘who left the Doge out?’ when that happens.”
Dogecoin differs from bitcoin in that there is no hard limit on the total supply of coins. Bitcoin has a fixed supply of about 21 million coins, of which not all have been mined yet. Dogecoin on the other hand has more than 129 billion coins outstanding, with 5 billion in new coins hitting the supply every year.
Even the founder of dogecoin, Billy Markus, can’t make sense of the surge in the coin he started as a joke. Markus told The Wall Street Journal in February, “The idea of dogecoin being worth 8 cents is the same as GameStop being worth $325, it doesn’t make sense.”
Dogecoin’s unlimited supply and the bewilderment of its founder hasn’t stopped investors from piling into the meme token, making it now more valuable than these 10 well-known companies, based off of Wednesday afternoon prices.
Crypto superstar Mike Novogratz has said he was too negative about dogecoin in the wake of the meme token’s blistering rally.
The billionaire CEO of crypto investment firm Galaxy Digital had long dismissed dogecoin as merely a joke. He criticized Mark Cuban for selling Dallas Mavericks tickets and merchandise in DOGE and last week told people not to buy it.
But on Monday evening he tweeted: “I had been too bearish. Glad I’m not short.”
Novogratz also shared a report by Galaxy Digital’s research arm that said dogecoin “has remarkably strong fundamentals and powerful forces supporting its rise.” It added: “DOGE should not be ignored.”
The report follows a breakneck rally in dogecoin, a cryptocurrency that was created as a joke in 2013. Dogecoin was up 35% on Wednesday to $0.64552, according to CoinGecko, after touching a record high of $0.68602.
It smashed through the $0.50 barrier on Tuesday after exchanges eToro and Gemini on Tuesday said they would launch dogecoin trading.
By Wednesday morning it had risen 1,015% over 30 days and 25,860% over a year, making it the fourth-biggest cryptocurrency by market size at $83.46 billion.
Novogratz’s Galaxy Research concluded in its report that dogecoin remains deficient to bitcoin – the world’s biggest cryptocurrency – in many ways.
“The network’s immaturity is revealed in qualitative factors like a lack of infrastructure and development,” it said, adding that dogecoin’s unlimited supply and lack of use cases dented its appeal.
But it also argued dogecoin is an admirable project that is capable of rallying significant support.
Dogecoin’s appeal lies in the fact that it is a joke “mocking a frothy market with its playful indifference,” the report said.
“In our view, current dogecoin volatility is fueled by mania, but it is likely that dogecoin will continue to be part of this cryptocurrency story over the long run, always in bitcoin’s shadow, but always lurking and periodically outperforming to surprise us all.
“Dogecoin’s longevity is ensured so long as one truism remains: people love a good joke.”
However, many analysts have warned dogecoin and other so-called altcoins remain speculative and highly risky investments.
Dogecoin dropped over Wednesday night and into Thursday morning as the red-hot rally in the joke cryptocurrency faltered.
The coin was down 11% to $0.28044 in the 24 hours to 9.55 a.m. ET, according to CoinGecko. That was 32% off the record high of $0.41888 reached on Tuesday.
Despite the fall, Dogecoin remained 375% higher than 14 days earlier. It had climbed 14,200% over the year to Thursday.
The breakneck rally in a cryptocurrency that was started as a joke in 2013 has astounded traditional financial analysts.
Dogecoin has benefited from the frenzy around cryptocurrencies that has consistently pushed bitcoin and ether to record highs over recent months.
But a groundswell of support for Dogecoin built up on the internet in recent days, boosted by celebrities such as Elon Musk. It has drawn comparisons to GameStop, the video game store whose stock traders organizing themselves on Reddit pumped up in January.
“DOGE has, of course, already experienced a massive speculative price push, which has, quite interestingly, held up for an extended period of time,” Justin d’Anethan, head of exchange sales at crypto exchange Equos, said.
“Volatility is a double-edged sword, though, and prices ramping up quickly in strong days can fall back very quickly.”
Neil Wilson, chief market analyst at trading platform Markets.com, said: “It’s the definition of a speculative bubble and the ‘greater fool theory’ in action. They go up and up and when gravity decides to act, it acts fast.”
Dogecoin fell 20% on Wednesday after the meme cryptocurrency touched an all-time high of close to $0.42 the previous day in the wake of a remarkable rally.
Fans of the digital asset, which is based around the Shiba Inu Doge meme, celebrated April 20 as ‘Doge Day’ and helped push the coin up to record highs. Even businesses such as Slim Jim and Snickers got involved.
But Dogecoin fell 21% in the 24 hours to 7.45 a.m. ET, according to CoinGecko, taking it to $0.3075. That compared to an all-time high of $0.4188 touched on Tuesday.
“The current retail fervor probably won’t completely give up on Dogecoin, but a sell-the-event reaction [to Doge Day] could be in the cards,” Edward Moya, senior market analyst at currency firm Oanda, said.
Nonetheless, the cryptocurrency’s 14-day gain stood at 376%, while its 1-year gain was an astounding 15,470%.
Its rally has been driven by celebrities such as Elon Musk, who played a part in the latest jump by tweeting an image of “Doge Barking at the Moon” on Thursday.
Many Dogecoin fans had hoped it would rise to $0.50 or even $1 on Doge Day but were left disappointed.
Analysts have compared the Dogecoin phenomenon to GameStop, which day traders sent soaring in January.
Analysts at the Kraken Exchange said in a note on Tuesday: “As the [GameStop] saga has shown, as well as DOGE’s price action thus far this year, there’s no telling how high memes can send an asset.”
Yet many are warning that investors could get burned. Susannah Streeter, senior investment analyst at Hargreaves Lansdown, said: “Investors should be extremely cautious about getting caught up in this herd mentality because Dogecoin is very much a speculative bet.”
An accumulation of interest in the new crypto favorite Dogecoin has taken the cryptocurrency by storm with its 8,000% rally so far this year.
The meme-based token rose more than 200% last week, fueled by Elon Musk’s “Doge Barking at the Moon” tweet. A day before the billionaire’s tweet, only several hundred Twitter users engaged with the hashtag “$Doge.” But engagement soared over 16,000% just a day later, with over 55,000 Twitter users joining in, according to data from online social analysis platform Cyabra.
In the Dogecoin community’s latest attempt to beat the coin’s all-time-high, investors are now eyeing a target of $0.42 to make its 4/20 mark on April 20, or “Doge Day.”
After Dogecoin peaked at a record $0.41 this week, online trading platform Robinhood began to experience major crypto trading outages due to unprecedented demand. That meant many investors were unable to join in on Dogecoin’s rally when it was at its peak. This is similar to the GameStop situation in January when traders were unable to get in on the booming stock because activity in the shares was restricted following high demand.
Here’s why the currency that was started as a joke is now seeing surging popularity, according to nine experts.
Disruption to the financial elite
“Dogecoin is a lighthearted and authentic community built upon a serious cryptocurrency infrastructure. It fills a niche that BTC and ETH do not. Its lightheartedness also makes it perfect for sending a message to the current financial establishment, which is anything but lighthearted. The more that the financial establishment is dismayed, the better.” – Investing and risk expert, Dr. Richard Smith
“The overarching narrative behind the coin’s 30x run this year is a protest against systemic inequities in the traditional financial industry – Dogecoin is, after all, the original “meme asset.” This is an extension of the value that cryptocurrencies derive from vibrant and growing communities that give rise to network effects.” – Thomas Perfumo, head of business operations and strategy at Kraken Digital Asset Exchange
“Many people view Doge as the ‘people’s cryptocurrency’ because it was created as a joke. Major players and corporations are unlikely to buy in and manipulate the market or understand that it could be a viable currency. Elon has echoed this sentiment. These factors have created a perfect storm for Doge, pumping the price to where it is today.” – Ben Weiss, CEO at bitcoin ATM operator CoinFlip
“While the Coinbase listing brought attention to crypto as a whole, for DOGE, it was a combination of Elon Musk’s tweets, as well as WallStreetBet’s recent interest in crypto that really kicked off this rally.” – Jason Lau, COO at San Francisco-based exchange OKCoin
Dogecoin is gaining traction because it is “still relatively cheap and people who may feel like they missed out on the upside of Bitcoin are thinking that perhaps this is their shot.”
“The sentiment seems to be: Bitcoin is for the wealthy, Ethereum for the middle class, and Dogecoin is for the people.” – Eric Berman, senior legal editor of US Finance at Thomson Reuters Practical Law
Emotional reactions to mainstream adoption
“I am quite confident that there is no real background to the current phase of Dogecoin’s growth. The rate is currently related to the general mood of investors on the crypto market and is a kind of indicator of the emotional state of market participants, reflecting their expectations.” – Maria Stankevich, chief business development officer at crypto exchange EXMO UK
“It’s a testament to how far narratives, memetic themes, and flows drive markets rather than fundamentals. In the old paradigm fundamental value would provide a magnet for prices to gravitate towards. In the new paradigm, it is all about flows – the order book, the buyers and the sellers.” – Roshun Patel, vice president at digital currency prime broker Genesis
“The latest uptick in Dogecoin’s price isn’t indicative of any meaningful value the cryptocurrency offers, it’s just a surge in interest from people looking to get rich quick. That can make for a fun bet, but it’s not good investing. And if you’re the one left holding on to the coins when the market tanks, you may regret taking a punt in the first place.” – David Kimberley, analyst at UK investing app Freetrade
“It’s moved by headlines, tweets, celebrity, or corporate endorsements and while that’s likely belittled by ‘traditional’ investors, it’s what brings the masses to cryptocurrencies. The masses understand headlines, tweets, and endorsements and the masses will likely mature as crypto enthusiasts and begin to appreciate the movement for its more technical nuances.” – Michael Kamerman, CEO of Scandinavian-owned brokerage Skilling