When Time named Elon Musk the 2021 Person of the Year yesterday, the fourth sentence read: “With a flick of his finger, the stock market soars or swoons.” And that’s nothing to what a casual tweet can do for Dogecoin, the meme-flavored joke coin that Musk has more or less single-handedly turned into an actual cryptocurrency.
One, in fact, that is in the top 10 cryptocurrencies, with a $6.1 billion market capitalization at a price of $0.19. It’s all-time high, on May 8, was nearly $0.74. Which isn’t bad when you consider that Dogecoin, or DOGE, started 2021 at $0.01.
On Feb. 4, Musk tweeted a picture from the Lion King, in which the newborn Simba is introduced as “Circle of Life” plays with his own face pasted on Rafiki and the Dogecoin Shiba Inu dog on Simba’s, with the message “ur welcome.” Dogecoin soared 57% in 24 hours.
ur welcome pic.twitter.com/e2KF57KLxb
— Elon Musk (@elonmusk) February 4, 2021
On April 1 — note the date’s significance — Musk tweeted about his rocket company: “SpaceX is going to put a literal Dogecoin on the literal moon.” Doge jumped 28% in an hour, retreating to about 12% 24 hours later. He has tweeted before that both doge and bitcoin will “moon” — crypto lingo for skyrocket in value.
SpaceX is going to put a literal Dogecoin on the literal moon
— Elon Musk (@elonmusk) April 1, 2021
So, when the world’s richest man announced to his 66.4 million Twitter followers that his electric car maker, Tesla, would make some of its merchandise — not cars, mind you — “buyable with Doge & see how it goes,” no one in the crypto industry was too surprised that the cryptocurrency spiked 20%.
Musk has even parodied his own Dogecoin tweets’ power. In March he tweeted “Doge meme shield” over a cartoon of a soldier protecting a sleeping child from flying knives and bullets. The words Dogecoin Value Dropping” was pasted over the weapons, “Memes” over the soldier, and “Dogecoin” over the child.
Doge meme shield (legendary item) pic.twitter.com/CeomU9q84c
— Elon Musk (@elonmusk) March 1, 2021
And, he’s not always good for Doge. A tweeted criticism about the concentration of Doge holdings by a few “whales” knocked the price for from $0.63 to $0.49, although it bounced back to $0.59 about six hours later. And his Saturday Night Live appearance in May was supposed to be good for Doge, but ended up tanking it after he called it “a hustle” in a skit.
If major Dogecoin holders sell most of their coins, it will get my full support. Too much concentration is the only real issue imo.
— Elon Musk (@elonmusk) February 14, 2021
His impact on Bitcoin can — at times — be similar. Particularly given its market cap of $886 billion, which is currently down substantially from the $1 trillion it held for much of the year.
In January, Musk added “#bitcoin” to his Twitter bio, causing it to spike 20%. Then in May he announced that Tesla had bought $1.5 billion in bitcoin and would accept the cryptocurrency for its cars, causing it to spike, and then retreated from bitcoin payment due to environmental concerns, whereupon it tanked.
That led Blockchain Research Labs to issue a report on Musk’s Twitter influence on bitcoin and dogecoin prices. Noting that his addition “#bitcoin” to his Twitter bio increased the largest cryptocurrencies market cap by about $111 billion in a few hours, the firm said it “[led] to the question under which conditions people in the public eye should comment on specific cryptocurrencies.”
It added: “If a single tweet can potentially lead to an increase of $111 billion in Bitcoin’s market capitalization, a different tweet could also wipe out a similar value.”
Certainly, the SEC shares that opinion. In August 2018, Musk tweeted that he was taking Tesla private at $420 a share — referencing the number’s use as a word for marijuana — which was a lot more than TSLA’s value at the time. The SEC filed securities fraud charges, which Musk fought for a while before settling by paying a $20 million fine, stepping down as chairman of Tesla, and having company oversight of his Twitter account.
Dogecoin is a joke. Literally. The cryptocurrency started life in 2013 as a joke, when Jackson Palmer and Billy Markus turned a flippant Twitter comment into a cryptocurrency designed to be as un-investable as possible. For example, the block reward for mining new Dogecoin varies randomly between zero and one million DOGE.
And its logo of a Japanese shiba inu dog is an actual, popular meme, also dating back to 2013. The next year, Weird Al Yankovich used the meme — with no Dogecoin intent — in his parody video “Word Crimes,” a parody of Robin Thicke’s “Blurred Lines.”
Markus has taken a bemused view of his creation, noting that he didn’t keep any. Telling CNBC this May that he coded it in “about two hours,” he explained that “the crypto community can be pretty elitist and not very inclusive, and we wanted to make a community that was more fun, lighthearted and inclusive.”
Neither he nor Palmer — who is not at all amused — expected the small but determined community that formed around their creation, nor its explosion into the mainstream.
So, how successful is Dogecoin, really?
Well, a development effort has sprung up to make it actually useful as a decentralized app platform. It’s also been accepted as payment by other companies, including the r/WallStreetBets darling AMC movie theater chain, online computer and electronics store NewEgg and crypto-fan Mark Cuban’s Dallas Mavericks basketball team.
But, it even has its own dog-themed parody coin that is turning into a serious cryptocurrency: Shiba Inu coin, or SHIB, is pitched as an alternative to Dogecoin but running on the Ethereum blockchain. Created last August, it now has a market cap of $18.2 billion.