Elon Musk’s one-word tweet raises shares of cryptocurrency Dogecoin. FOX Business’ Kristina Partsinevelos and more.
The reckless abandonment of the investment world has a new solution: a cryptocurrency that started as a joke in 2013 has mostly been forgotten, and thanks to a flurry of tweets from Tesla Inc. CEO Elon Musk, it is suddenly more than worth $ 6 billion.
This is called dogecoin, a tribute to bitcoin designed to serve no real purpose. Dogecoin holders can not buy much with it and can not easily convert it into cash. For most of his life, the virtual currency traded for no other reason than to generate laughter online.
Dogecoin is named after an internet meme that surfaced almost a decade ago. The meme centered around an image of a Shiba Inu dog with bad play habits (i.e. doge instead of dog). Users put the dog’s hairy face on everything from astronauts to Twinkies.
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In 2013, software developer Billy Markus watched bitcoin’s popularity and decided to make its own light-hearted cryptocurrency. He first based it on the video game ‘Animal Crossing’ and called it Bells, named after the game’s handicap currency.
People online hated it, he said. When another developer, Jackson Palmer, shared a new idea for a doge meme based on cryptocurrency, Mr. Markus reconfigures his clock code to fit the meme.
He set out to create a coin so ridiculous that it could never be taken seriously. In exchange for solving mathematical puzzles, dogecoin miners who use fast-moving computers receive from one dogecoin to hundreds of thousands of dogecoins.
The coin had a fleeting moment of fame when it started. In 2014, she helped online fans fund the journey of the Jamaican bobsled to the Winter Olympics in Sochi, Russia, and sent a girl-racing Nascar racer to the Talladega Superspeedway in Alabama. Like most memes, it disappears from relevance.
Then Mr. Musk. On January 28, he tweeted a faux “Dogue” magazine cover.
Dogecoin has risen as a topic on WallStreetBets, the Reddit forum that trades in GameStop Corp. At the end of January, the price of dogecoin rose from half a cent to 8 cents, where it traded at the beginning of the month.
The billionaire Tesla boss tweeted about it again on Thursday, which he said would break an interruption of the social media platform. “No highs, no lows, just Doge,” he posted. Dogecoin immediately shot up 80% intraday, before making a profit.
Dogecoin’s volunteer-run network has struggled to accommodate the influx of buyers. The volunteers raised real money – in euros – to buy more server space.
Mr. Markus, who no longer works on dogecoin, could not believe that the code he wrote in a Sunday in three hours gave a cryptocurrency worth billions of dollars in total market value.
“The idea that dogecoin is worth 8 cents is the same as that GameStop is worth $ 325,” said Markus, 38. “It doesn’t make sense. It’s super absurd. The coin design was absurd.”
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Users can purchase dogecoin with a credit card on cryptocurrency exchanges and trading platforms, including Robinhood Markets Inc.
Damian Wawrzyniak, a chef at a restaurant in Peterborough, England, had not heard of dogecoin before. Musk did not tweet about it. He quickly tracked down a bit through a cryptocurrency account he used during the Covid-19 closing.
Dogecoin is a ‘completely strange name’, he said, but he realized that Mr. Musk, which has about 45 million Twitter followers, added to its appeal.
At the end of January, a small group of protesters gathered in front of Robinhood’s headquarters in Menlo Park, California, over the restrictions the broker had placed on trading in GameStop, AMC Entertainment Holdings Inc. and other companies that were popular on Reddit.
As Dave Jevans, CEO of cryptocurrency firm CipherTrace, walks past on his way to the grocery store, a woman approaches and encourages him to participate.
“The market is knee-jerk,” she said.
“Buy bitcoin,” he joked with her.
“No, no, no,” she shot back excitedly. “Buy dogecoin! Have you seen it? I think we can get it for a dollar.”
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A chorus of buyers on Reddit made it their mantra to push dogecoin to $ 1. The Twitter account TikTok Investors posted a video of a woman in purple workout clothes singing about taking dogecoin ‘to the moon’.
In theory, it would be difficult for dogecoin to reach $ 1. Unlike bitcoin, which limits the number that can be mined at 21 million, dogecoin does not have such a limit. However, the rise of GameStop has reminded investors that anything is possible.
The newfound zeal for the cryptocurrency has even found converts who once despised dogecoin. Angelicah Shaver, a 28-year-old graduate student who runs a YouTube channel focused on cryptocurrencies, called it in a tweet in early January “literally an insult to the tech community” since its inception.
But as the hype escalated, she decided to use it as an opportunity to teach beginners to cryptocurrency how to buy, sell and analyze coins. She bought $ 1,000 dogecoin in the last week of January, just before the price skyrocketed, and holds her position.
“Fate loves irony, and it’s so true,” she said. “I’ve spoken out against dogecoin so many times. I literally said dogecoin is an insult to technology, and here I am now holding this bag of doge.”