Elon Musk & His DOGE & DogeCoin Adventure: CHART OF THE DAY
A pump-and-dump dressed up as a fake cabinet post?: Elon Musk’s DOGE took money Congress had lawfully appropriated to fight disease and grow the world economy, and simply nixed it. The crypto coin that Musk was then not so quietly promoting made a round-trip: the DogeCoin chart runs $0.09 to $0.40 and back to $0.09. But the 800,000 or so who would be alive today without DOGE’s illegal and unconstitutional chaos-monkey wrecking ball did not come back:
A reminder about Elon Musk’s Department of Government Efficiency: It took money and resources that the elected representatives of the people of the United States of America had legally and constitutionally appropriated to spend to boost world economic growth and improve public health worldwide. It, illegally and unconstitutionally, nixed them.
And the Republican majorities in the House and Senate, plus the corrupt Republican majority on the Supreme Court, blocked attempts to, you know, faithfully execute the laws of the United States of America that established and funded AID. And as a resuls so far we have 800,000 people dead who would under the normal course of things have been alive today. <https://newlinesmag.com/reportage/the-zero-people-who-died-after-usaid-was-dismantled/>.
It was, also, an attempt to raise the salience of the crypto asset that is DogeCoin:
As such, it succeeded in the short and failed in the medium run: Musk’s DOGE “government-service” adventure drove a rally in DogeCoin from $0.9 to $0.40 as Trump won the election and established Musk as the head of DOGE. But it is not back to $0.09.
Of course, maybe that roundtrip was the desired outcome: the journey is, after all, the reward to people who sell at the peak:
Back in memory lane, we have:
Lionel Lauent: Why Elon Musk’s Dogecoin Tweets Have Hit a Bitcoin Nerve <https://www.bloomberg.com/opinion/articles/2021-02-08/why-elon-musk-s-dogecoin-tweets-have-hit-a-bitcoin-nerve>: ‘When will the penny drop for cryptocurrency speculators that maybe the joke’s on them?
February 8, 2021 at 2:30 AM EST
Imagine a team of smartly dressed bankers pitching an investment to Wall Street financiers only to be left raging when a weirdo in a dog costume walks in and gets the money. That’s how some corners of the cryptocurrency market are reacting to celebrities led by Elon Musk tweeting about Dogecoin, a tongue-in-cheek, meme-ified version of Bitcoin launched in 2013 with a Shiba Inu as its mascot.
The billionaire’s endorsement last week of Doge as “the people’s crypto” — cheered by KISS rocker Gene Simmons and rapper Snoop Dogg — sent trigger-happy Reddit traders stampeding into the canine-themed coin. As a result, its price is up around 1,000% year-to-date, eclipsing Bitcoin’s rise. Musk, reveling in the social-media excitement and speculation, tweeted: “I am become meme, destroyer of shorts.”
Rather like the financial-sector sophisticates who shook their heads when Redditors charged into video-game retailer GameStop Corp., creating a bubble that’s already deflating, some Bitcoiners have chided Musk for inciting a doomed punt, adopting the tone of their “boomer” forebears. “You’ve actually become a destroyer of lives,” one tweeted. Cameron Winklevoss, one half of the famous Facebook twins, faced similar scorn when he cracked his own gag, saying Dogecoin is “fun money” to the U.S. dollar’s “funny money.”
The wagging fingers have a point. Musk’s recent run of market-moving tweets has helped drive irrational exuberance among locked-down traders looking for easy gains and crowd validation. Past run-ins with the Securities and Exchange Commission show that regulators don’t always see the funny side either.
Yet there’s a self-serving side to the outrage. Part of it is the realization that it’s possible Musk’s past social-media praise of Bitcoin wasn’t as sincere as some had thought. The deeper fear is that if Dogecoin ends up just another YOLO (You Only Live Once) pump-and-dump in the crypto timeline, it will reflect badly on all tokens — even Bitcoin, which has recently basked in the glow of being promoted on Wall Street as an alternative to gold.
Bitcoin’s ability to keep reeling in institutional investors depends on its pitch as a digital safe haven disrupting analog alternatives. Never mind that Bitcoin works neither as a reliable market hedge in times of panic nor as a gold-like store of value, as its price gyrations throughout the Covid-19 pandemic have made clear. Hedge funds have taken the bait of a rapidly rising price and the hook of a macroeconomic narrative of an impending inflation-driven apocalypse. There’s speculation here, too: Price momentum, the promise of outsize gains and artificially scarce supply in a market juiced by central-bank stimulus.
A crowd-driven rally in Dogecoin, if it lasts, spoils the Bitcoin purists’ story somewhat. Thrill-seeking Bitcoin believers will wonder whether they’re missing out on easier money if Doge is still alive and hitting record highs. Scratching the surface of its goofy image reveals a competitive economic narrative: While the canine token copies a lot of the original cryptocurrency’s features, it’s an expressly inflationary asset with a circulating supply of more than 100 billion. It’s faster to transact and easier to mine than Bitcoin. If Dogecoin’s price keeps popping, expect advocates to push stories offering a very different philosophy to drown out Bitcoin’s HODL (Hold On For Dear Life) hoarders.
The problem for Bitcoiners is that even a blowup of the Dogecoin trade would leave their own favorite cryptocurrency potentially tainted by association. Unlike with GameStop, there aren’t obvious fundamentals to explain why Dogecoin is overvalued while Bitcoin would be undervalued. Debates about which is “better” might draw on technological use-cases, security and adoption, but these don’t add up to dollar-and-cents estimates. Alexandre Stachtchenko, a board member of Paris-based blockchain association ADAN, tells me a Musk-driven boom-and-bust in Dogecoin would make it harder to promote more serious projects: “A neophyte will not be able to tell the difference.”
He’s probably right to be concerned. When the Initial Coin Offering bubble burst in late 2017, Bitcoin wasn’t spared: Its price sank almost 90% over the course of a year and didn’t fully recover until last December. A crypto crash this time around might see hedge funds go back to putting Bitcoin in the same bucket as Dogecoin and others, not gold or the dollar — call it meme reversion.
Hence why some are laughing through gritted teeth at Musk’s tweets — the joke may ultimately be on all of crypto.
BitCoin, by contrast, has continued to hold its value in this Age of Trump & His Grifters:
