Dogecoin started as a joke. In the initial months of 2021, the joke appeared to have turned on those who didn’t take the meme cryptocurrency seriously. The meme-cryptocurrency Elon Musk wouldn’t stop tweeting about reached an all-time high in mid-April, crossing 10 cents for the first time. The rally has led to occasional surges, the result of a semi-ironic movement that’s involved thousands of buyers, tens of thousands of online posters and the world’s richest man, Elon Musk. In early January, each token was worth less than one cent. In late January, when both the GameStop and DogeCoin movements hit their stride, the value of DogeCoin shot up to 7.5 cents, well over a 10-magnification, before sliding down to 2.5 cents. The coin has spent the past few months in the three- to seven-cent range. But can Dogecoin sustain what it started?
There may be more than Elon Musk, cryptocurrency enthusiasts and meme lovers involved. Robinhood app, the popular platform for cryptocurrency trading, in its S-1 filing publically revealed, that in the first three months of 2021, “34 percent of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin.” At the same time, revenue from cryptocurrency transactions went from 4 percent for the last three months of 2020 to 12 percent of its total revenue in the first three months of 2021, reports The Verge.
“If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected,” reads the prospectus, according to Vice. “If the markets for Dogecoin deteriorate or if the price of Dogecoin declines, including as a result of factors such as negative perceptions of Dogecoin or the increased availability of Dogecoin on other cryptocurrency trading platforms,” Vice further adds.
Robinhood does not solely depend on cryptocurrency transactions: The company burst into the public consciousness with the rise GameStop, and the Wall Street Bets subreddit early this year.
Can Dogecoin, however, survive? Elon Musk, Tesla CEO, SpaceX boss and Dogecoin advocate, in May, mentioned, that this cryptocurrency may be the future. In the interview, he says that “There is a good chance that crypto is the future currency of the world. Then the question is which won is it going to be? It could be multiple,” he said. He then explains the origins of how Dogecoin was invented as a joke, essentially to make fun of cryptocurrency, and that’s the irony, explains Musk. “That the currency that began as a joke, becomes the real currency.” In the video, he does add that, “Don’t invest your life savings into cryptocurrency. That’s unwise.”
Elon Musk has an Internet term coined after him: ‘The Musk Effect.’ With a single tweet, Musk could move markets. But Musk may be losing his way with his crypto stans. On July 2, Musk’s ‘Doge’ version of ‘Baby Shark’ witnessed a minor change in Dogecoin’s value, with 3% gains, but the overall value over 24 hours still remained in negative. A spin-off of Dogecoin, ‘Baby Doge,’ however, saw a more lasting impact. Crypto enthusiasts have also stopped enjoying Musk’s tweets since he announced that Tesla will no longer be accepting Bitcoin as a payment method. Over the weeks, the response to Musk’s tweets has become increasingly negative – with people blaming him solely for the rise or dip in prices, saying it cost them a loss and he’s ‘manipulating’ markets. Some took this a step further – by making a cryptocurrency solely dedicated to stopping Musk: $StopElon.