What are dogecoin and its connection to Elon Musk
It is a meme-based cryptocurrency that was started in 2013 as a parody of bitcoin. As of May 10, 2021, its evaluation is worth $93.38 Billion.
Last year a bunch of Redditors and with their leader r/walstreetbets broke the back of a wall street investing firm named Melvin Capitals. It was reported that Melvin Capitals was shorting the stocks of a Company called Gamestop. It all started as a meme but then the multiple folds of people poured their money on the advice of r/wallstreetbets which resulted in Gamestop entering the list of Fortune 500 companies for a short period.
The aftermath of this event drew the attention of everyone involved towards the cryptocurrency named Dogecoin which was the parody of bitcoin, invented in 2013. Suddenly, soaring to an all-time high last week. As of May 7, dogecoin was up more than 26,000% in the last six months, outpacing percentage gains of other cryptocurrencies like Bitcoin and Ethereum.
In 2013, software engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency as a way to make fun of bitcoin and the many other cryptocurrencies boasting grand plans to take over the world. They called it dogecoin – pronounced “doje coin” with a soft “g” sound – after the popular “doge” Shiba Inu meme.
According to researchers, the appeal of Dogecoin lies in its honesty. “The appeal of dogecoin has always been its honesty,” researchers explained in a note to clients dated May 4. “Unlike many other cryptocurrency projects…there’s no grand vision, no pronouncements about how dogecoin will change the world.”
Additionally, while bitcoin has a capped supply of 21 million coins, there is no limit to the number of dogecoins that can be created.
“One of the value propositions of bitcoin is digital scarcity; that there will only be 21 million,” said Mati Greenspan, portfolio manager and founder of Quantum Economics. “There is no such hard cap [with dogecoin], and it has a crazy inflation schedule.”
Now comes the endorsement by Elon musk. Elon is notorious on Twitter, he made fun of people, get involved in politics and follows the meme culture. Elon stated that dogecoin is his “fav cryptocurrency” and calling it “pretty cool”. However, he is not the only celebrity to push the animal-branded token. NBA team Dallas Mavericks owner and billionaire Mark Cuban has come out in support of Dogecoin. On April 26, Cuban announced that his basketball team was on track to complete more than 6,000 dogecoin transactions by the end of April.
“Doge is the one coin that people use for transactions,” Cuban said when asked by a user why he was backing dogecoin. “People spend their Doge and that means more businesses will start taking it.
It was a wild ride for the investors last week, as Elon hosted a popular late-night show SNL, while hosting it he made the public aware of the risks involved in investing in the cryptocurrencies. Due to this, the price plummeted as people starting to sell their dogecoins to secure their investment. Dogecoin was quoted as low as $0.47 on crypto exchange Binance, down 28% from levels around $0.65 before the show. However, after the show, Elon Musk announced that his rocket company SpaceX will now accept the meme-inspired cryptocurrency dogecoin as payment.
Musk tweeted that “SpaceX launching satellite Doge-1 to the moon next year Mission paid for in Doge 1st crypto in space 1st meme in space”.
“This mission will demonstrate the application of cryptocurrency beyond Earth orbit and set the foundation for interplanetary commerce”, said SpaceX Vice President of Commercial Sales Tom Ochinero in the statement released by Geometric Energy.
On crypto data tracker CoinGecko.com, dogecoin jumped more than 800% over the last month and is now the fourth-largest digital currency.
“I started trading Dogecoin cause it was trending, but now I find it useful to keep small amounts in case I need the USDT [another cryptocurrency] equivalent to make up when I’m buying bigger assets. For example, if there’s a deficiency of 2 or 3 USDT, I can’t buy because of the minimum limits on online crypto exchanges.”, a small scale Indian cryptocurrency investor.
Dogecoin is a volatile cryptocurrency, and investing in it comes with risks, therefore investor discretion is advised. Novice crypto investors can also be scammed online instead of a promise to double or triple their money in a short period. Exercise caution and invest wisely.
