Rockets aren't the one thing Elon Musk is sending into the stratosphere.
After a three-year crash, Dogecoin explodes againa 250% increase because the election of Donald Trump – a part of a broader wave of optimism within the industry as Trump courts crypto advocates during his campaign.
Trump's informal appointment of Musk to what he calls Ministry of Government Efficiency – DOGE for brief – has also helped advance the dog theme same corner.
This isn't the primary time Musk has referred to himself as “the doge father“has sparked interest in Dogecoin.
In May 2021, the worth shot up in anticipation Musk's guest appearance on “Saturday Night Live.” During one skit, Musk played a financial analyst in conversation with one Weekend update host who repeatedly asked him, “What is Dogecoin?” After some confusion, Musk’s character finally admitted that it was a hustle. The price of the coin went down right into a free fall. Just a little over a 12 months later the time had come lost over 90% of its peak value.
The losses hit small investors hard. One of them in 2022 filed a category motion lawsuit against Musk for market manipulation and insider trading, although the case was dismissed in August 2024.
Why has Dogecoin – a meme coin that ought to never be taken seriously as an investment – experienced such extreme fluctuations in value?
We're all on this together
Dogecoin was launched in 2013 to counterfeit Bitcoin and quite a few other cryptocurrencies that were said to disrupt traditional finance. Two strangers from all over the world met onlinecopied the code of an existing coin and branded it with the already popular Doge Internet memes – an image of a Shiba Inu dog surrounded by fragments of broken English: “Wow, a lot of money.”
Although Their most important goal was to provide the coin Pointless and unwanted, it became one of the crucial popular and enduring cryptocurrencies available on the market.
Following Dogecoin’s previous surge in 2021 I studied how His passionate network of influencers and on a regular basis investors worked together to bring massive attention – and capital – to the joke currency.
To understand the appeal of those absurd investments, one must have a look at the time and energy that users spend money on these networks and the financial and social rewards they receive in return.
Meme coins are collaborative firms. Members of those online communities have an economic incentive to develop into outspoken supporters: the more the worth of Dogecoin increases, the more their investments grow. But additionally they receive social validation from other meme coin investors after they pump the coin.
In other words, behind every meme coin is a collective of strangers with a shared mission to earn more money.
Dogecoin and its imitators have been described by their leadership as Crypto movements, traveling together And communal Projects. Beyond branding the assets with culturally relevant images, be it a Shiba Inu dog or Pepe the frogSuccessful crypto firms are characterised by complex networks of trust. Trust within the technology. Trust in its potential for future appreciation. And trust that those that have power within the networks is not going to exploit the remainder.
This loyalty comes from a worldwide network of users who work together across the clock to advertise their coin and reveal their unwavering commitment to its success.
In times of price increases, the collective hums with elation.
When prices drop, community members reinforce one another's convictions of their comrades – and their very own – that that is only a bump within the road and that their joint efforts will ultimately result in a handsome profit. Even within the coldest season Crypto winterThis ritual behavior helps these speculative communities persist. Community serves as an alternative choice to financial loss.
The investment strategies in these communities – and the assumption that they are going to repay – involve repeating and reposting what others have said, like every traditional web meme.
Trolling the standard review
The true value of meme coins can’t be understood in the identical way as traditional assets akin to stocks and physical goods. These kinds of assets have fundamentals, akin to an organization's financial statements or public demand for basic goods, from coffee to grease.
Conversely, the basics of meme coins are reflected of their network activity, akin to: B. every day energetic users, and in less concrete metrics, akin to. B. the social mood and Share thoughts – how much public attention a coin has generated in comparison with its competitors.
Of course, traditional asset valuations are also influenced by these social aspects. The difference is that meme coins offer little productive activity. They contribute nothing to the economy. Occasionally their leadership will Build financial services around thembut these are generally added as an afterthought, particularly to create more speculative excitement.
Meme coins troll traditional valuation conventions and mock the edicts and dogmas of mainstream investors.
And that's precisely the point.
Participating in meme coin communities – or other crypto communities for that matter – means having another economic experience. They are speculative sandboxes for enjoying outside of traditional investing rules.
Who let the doge out?
Musk is the epitome of the meme coin influencer par excellence.
As the richest man on the planet, he is taken into account by many to be a model of smart investing. His huge fan base goes far beyond the Dogecoin social network. And his promoting efforts are playful – so playful that the judge in his class motion lawsuit dismissed his Dogecoin tweets as mere “buffering” and that “no reasonable investor could rely on them”.
Dogecoin previously reached the height of its memetic momentum when Musk appeared on “Saturday Night Live.” Instead of sitting on the Weekend Update news desk cracking jokes, he's now sitting in Trump's office advising the president-elect. In other words, Dogecoin's memetic resonance has spread from popular culture to politics, helping it capture a bigger share of public opinion.
While Dogecoin has particularly benefited from Musk's closeness to Trump, there’s optimism within the broader crypto market a couple of crypto-friendly government. Speaking on the Bitcoin 2024 conference in July, the GOP candidate asserted that he would enable the United States to “the crypto capital of the planet.” After watering $131 million this election cycleThe crypto industry can now claim 274 pro-crypto members of the US House of Representatives and 20 pro-crypto US Senators.
Between Musk's friendship with Trump and a changing regulatory environment, the dog can run free again.
image credit : theconversation.com