Dogecoin, Elon Musk and Saturday Night Live – here’s why memecoins continue to rise
Doge's list of celebrity backers has continued to increase since the start of the year.
- Mr Doge — aka Elon Musk — is all set to host Saturday Night Live next week.
- Over the course of the last 12 months, DOGE's value has surged by more than 12,000%.
- Since early 2020, Musk has repeatedly showcased his support for Dogecoin, even referring to it as the "people's cryptocurrency".
It's no secret that memes have become a major part of the global internet landscape in recent years, thanks in large part to their ability to relay important cultural and social information in a manner that is not only humorous but also easily digested by the masses.
In this regard, Dogecoin, a "parody cryptocurrency" that was founded all the way back in 2013—primarily as a means of poking fun at all of coins vying to challenge bitcoin's dominance—has become an interesting topic of study for many, especially since its value has been surging quite rapidly in recent weeks.
As a result, a number of investors are now beginning to view the currency as a legitimate financial instrument that can be used as a potential store of value. To put things into perspective, since the beginning of April, the value of DOGE has increased by a whopping 450+%, with a single token rising from AUD $0.069 to AUD $0.40. Not only that, on April 20, the top 10 altcoin scaled up to an all time high of AUD $0.55.
Mr. Musk has a lot to do with Doge's ongoing ascent
The crypto market has been on a tear over the last many months, with the total capitalization of this space doubling from AUD $1.29 trillion to AUD $2.57 trillion between February and April. This is in large part due to the increased amount of institutional money that seems to have made its way into this fast evolving space.
For example, earlier this year, Tesla CEO Elon Musk announced that his company would be adding Bitcoin worth USD $1.5 billion onto its balance sheets. Similar trends were witnessed across the board with a number of traditional players including Microstrategy, Square, etc also investing significant sums of money in crypto.
While a Bitcoin investment on paper seems quite logical for big companies, especially when considering the fact that the flagship crypto can serve as a digital substitute for gold as well as a hedge against inflation, what's been interesting to note is that Musk has repeatedly showcased his support for Dogecoin for many months now.
Not only that, even a whole host of other celebrities such as rapper Snoop Dogg and Kiss bassist Gene Simmons have hailed the currency as a legitimate investment avenue. As a result, DOGE's status seems to have transformed from being an internet joke to one of the most popular cryptocurrencies in the world.
Is Dogecoin's rise sustainable?
Though Dogecoin's rise has been an amazing feel good story for many crypto enthusiasts across the globe, it is worth delving into the question of whether DOGEs ongoing meteoric rise is sustainable in the mid-to-long term.
From a technical perspective, one can see that with a crazy amount of new DOGE tokens being minted every day — 10,000 per minute/14.4 million per day/5.2 billion per year — the currency's future price action will continue to become increasingly unsustainable as we head into the future.
Furthermore, another way one can assess DOGE's future price movements is by looking at the total volume of US Dollars that it absorbs every day — so as to maintain its current price action levels. For example, the token is currently trading at AUD $0.45, which essentially means that in order for the currency to maintain its value, a total of AUD $5.73 million will have to continue to flow into the digital currency per day.
Doge mania to continue as Musk set to host SNL?
As pointed out earlier, Elon Musk has time and again referred to dogecoin as his being his 'fav' cryptocurrency as well as "the people's crypto." Continuing in this tradition, the billionaire recently tweeted out the following message: "The Dogefather SNL May 8" — which seems to reference his planned appearance on popular American sketch show 'Saturday Night Live' next week as well as his undying love for Dogecoin.
Similarly, NBA franchise owner Mark Cuban too has been talking about Doge recently, claiming that his team is on track to complete 6,000 Dogecoin transactions by the end of this month, adding:
"Doge is the one coin that people actually use for transactions. People spend their Doge and that means more businesses will start taking it."
Even Vlad Tenev, co-CEO of trading app Robinhood, announced that he and his team are looking to introduce a feature whereby users will be able to facilitate Doge deposits and withdrawals along with a host of other crypto tokens. "We're working on deposits and withdrawals! Not just for DOGE, but for all coins on Robinhood Crypto.", he added.
Lastly, it should be pointed out that along with Dogecoin, a number of other "memecoins" too have seen their values surge quite substantially in recent times. For example, MonaCoin, Hoge Finance, DogeToken have all seen their market caps increase to AUD $226.2 million, AUD $135 million and $81 million respectively.
Disclosure: The author owns a range of cryptocurrencies at the time of writing