On December 14, Tesla founder Elon Musk tweeted that the electric car maker would accept Dogecoin (DOGE) as a payment method for some goods on a test basis. As soon as the tweet came out, DOGE rose 46.6%, becoming a "little green" in the "red bush" of the crypto asset market.
The "godfather" who stirred up the Dogecoin market is back.
People have dubbed Musk the "godfather of Dogecoin", and only this year, the founder of Tesla, with his personal remarks, has pulled the dogecoin (DogeCoin), which was created 7 years ago by jokes, from the price of a few cents more than 140 times, and thus formed a Meme (meme) coin plate in the coin market, and the copycat Dogecoin of various animal concepts appeared in the market with a super large circulation, pushing up the speculation of small fights.
This time, the news that Tesla accepted Dogecoin to pay for some of its goods once again led to a rise in DOGE, once again proving the emotional market characteristics of Meme coin, how long can the news-driven increase last?
Tesla will accept Dogecoin to pay for some of the goods
"Tesla will offer some items available for purchase through Doge and see how it goes." On December 14, Tesla founder Elon Musk tweeted about DOGE's use case dynamics.
As soon as the tweet came out, DOGE rose against the backdrop of an overall decline in the crypto asset market, rushing from near $0.15 to $0.22 at one point, up 46.6% in 2 hours, and then falling to near $0.19 in the next 4 hours.
Musk said that some Tesla merchandise will support Dogecoin payments
Musk didn't specify what items could be purchased with Dogecoin. Looking at the Tesla brand, its peripherals range in price from $50 to $1,900, including clothing, belts, and mini models of Tesla vehicles. Not long ago, on December 10, after the release of the new Cyberruck, the peripheral Cyberwhistle (Tesla whistle) was launched based on this model, which cost $50.
Whether these Teslas support Dogecoin payments is unknown, but Musk's ability to shout orders with more than 66 million Twitter followers is well known.
According to Coingecko data, Musk's tweets about Dogecoin, including his tweet calling Dogecoin "the people's cryptocurrency," helped the crypto asset soar 14,406% over the past year. You know, at the beginning of the year, Dogecoin was only $0.0047, and in May this year, that is, the month when Musk shouted the most intensive single crypto assets, Dogecoin reached an all-time high of $0.6818, but in the following 2 months, it fell to a low of $0.1728, down 74.6% from the all-time high.
Dogecoin was originally started in 2013 by programmers Billy Marcus and Jackson Palmer with a joke that, in order to satirize the crazy rise of Bitcoin, created an unlimited supply of Dogecoin, becoming the earliest Meme coin because it was cheap, easy to mine on the computer, mined and held by many crypto asset enthusiasts, originally used as a tip, with a strong grassroots attribute.
It can be said that until this year, Dogecoin was successfully out of the circle due to Musk's personal preferences. Not only that, his Shiba Inu pet and pet names have become the reason for some Meme coins to appear in the crypto market, such as Shiba Inu and Floki Inu, the cottage version of this type of Doge coin attracts a large number of retail investors due to its huge circulation and low price, and the speculation is strong, and the high market volatility of these Meme coins is constantly puncturing the bubble.
The Meme coin market is still dominated by sentiment
Tesla's acceptance of Dogecoin payments is still stuck in Musk's tweet stage. You know, the founder once said that "Tesla accepts bitcoin payments" less than 2 months after the water, he believes that "bitcoin is not a good alternative to trading currencies".
In May, Musk took a poll on Twitter asking if he wanted Tesla to accept Dogecoin. Later, in a TV show, Dogecoin was a kind of "market noise".
The founder of the world's largest electric car maker, repeated sentiment about crypto assets has even begun to affect the market. After Musk later said Tesla would not accept bitcoin payments, bitcoin began to dive from its first all-time high of the year. Since then, Musk has also been blacklisted by some crypto enthusiasts.
The news that Tesla accepted Dogecoin to pay for some of its merchandise once again led to a rise in Dogecoin, once again proving the sentimental market characteristics of some crypto assets, especially Memecoin.
Some cryptocurrency investors have stated that Dogecoin is a phenomenon similar to "meme stocks" such as GameStop and AMC that should not be taken seriously. Brad Garlinghouse, CEO of cryptocurrency company Ripple, has bluntly stated that he does not believe Dogecoin is good for the crypto asset market.
DOGE's market volatility this year
"Meme coins such as Dogecoin are speculative assets, and for this broad class of assets, sentiment is often one of the most important price drivers." Crypto asset analyst Chris McDonald said in a post that investors in Meme seem to be more concerned about a key driver, namely internet search volume, and the previous price spike of Dogecoin coincided with a sharp spike in search volume for meme coins, and the recent decline in its price was also a manifestation of declining search interest.
In addition, some investors are increasingly concerned about the fundamentals of crypto assets such as Dogecoin, which have little utility compared to other large blockchain networks, but traders have been looking for ways to rationalize their valuations, "This weekend, one indicator that investors seem to be focusing on is the ratio of mining revenue to market capitalization of the token," said MacDonald, adding that the parabolic rise in Dogecoin this year did occur with the increase in mining activity, "but maybe it's just correlation rather than causation."
Macdonald argues that with the decline in interest in Meme coins (as evidenced by the decline in search volume), coupled with the fading speculative frenzy for the crypto industry, "the likelihood of Dogecoin landing on the moon doesn't seem likely."
(Disclaimer: Please strictly abide by the local laws and regulations, this article does not represent any investment advice)
Would you consider Meme tokens as an asset of value?