Every doge has its day.
After riding a wave of hype and internet irony to over 70 cents per token, Dogecoin’s triumphant rise has ended for now.
Part of the reason the cryptocurrency, which entered 2021 at under a cent and maxed out at 72, reached such heights was Elon Musk’s hyped appearance on Saturday Night Live. Musk has been spruiking the coin since January, and hopeful crypto traders expected the Tesla founder’s appearance to be a huge advertisement for the memecoin.
But it wasn’t. Dogecoin was featured twice on the show, first when Musk’s mother made a cameo appearance and tutted that Elon had better not give her Dogecoin for Mother’s Day, and later in a skit in which Musk admitted the cryptocurrency is “a hustle.” Dogecoin fell from its Saturday high of 72 cents, crashing down to 45 cents. The price fell further on Wednesday when Musk said Tesla would no longer be accepting Bitcoin as payments.
Live by the Musk, die by the Musk.
The SNL gags, and the lack of a meaningful announcement on the show, seemingly wiped $40 billion off the cryptocurrency’s market cap. Crazy stuff. But not as crazy as the fact a joke coin was worth $90 billion in the first place, more than Spotify and Ford combined.
this is the funniest part of snl tonight pic.twitter.com/m5iBofzcpG— slate (@PleaseBeGneiss) May 9, 2021
Dogecoin is far from dead, as dramatic peaks and troughs are normal parts of the cryptocurrency cycle, but it’s no longer the hot coin. Instead, crypto traders have moved on to the many Dogecoin imitators that have flooded the market in recent weeks.
Kishu Inu, Akita Inu, Hokkaido Inu: Silly coins that have cute emblems but do little, just like Dogecoin. There’s also Keanu Inu, which channels John Wick, and, of course, a coin called ELON.
ELON is actually short for Dogelon. Its mascot is a mix between doge and Elon Musk, and its purpose is to be “the first interplanetary currency.” It’s cute.
It has over 40,000 investors and on Wednesday was worth over $450 million.
If you’ve been observing Dogecoin’s rise via headlines, kicking yourself for not chucking in a little green back when each coin was worth less than a dime, you’ve probably found it slightly difficult to wrap your head around. You’ve seen the numbers rise higher and higher despite Dogecoin, as a currency, not being used for much more than tipping on Reddit.
This is the principal insanity of cryptocurrency trading. If a company stock spikes in price, there’s usually a tangible real-world reason for it. Apple launches a new computer, a lot of people buy the computer, Apple’s stock price goes up 20%, as was the case with the iMac.
Cryptocurrency is not like that.
Some people in the space believe in the technology and actively try to progress it, but most are simply trying to get rich. Price movement is tied far more to community sentiment — what people think other people will buy — than real-world applications. People buy in for the simple reason that they expect more people to follow, thus a joke coin that doesn’t even pretend to be useful can be worth hundreds of millions of dollars.
Which brings us to the hottest cryptocurrency of the week: Shiba Inu. It calls itself the Dogecoin Killer and, unlike the previously mentioned “memecoins,” purports to have actual uses. It’s the foundation of a cryptocurrency exchange, ShibaSwap, and as an incubator for digital artists is tied to the NFT craze. It was also recently listed on Binance, the biggest cryptocurrency exchange.
All of which helped the token skyrocket in value. It went up 27,800% in the past 30 days, meaning $100 dropped in the middle of April would be $27,800 now.
Here’s where cryptocurrency can really give you a headache. Shiba Inu’s uses, if they exist at all, are arcane. Its popularity is mostly thanks to the appeal of Dogecoin, which was created as a joke to parody Bitcoin. Yet the Shiba Inu token has made people millionaires.
On Tuesday night, someone sold 430 ether worth of Shiba. That’s a tidy $1.85 million. What did they put in to get this gargantuan sum out? Looking at their wallet history (in cryptocurrency trading, you can see the contents of any wallet you have a link to), I see that this person bought all their Shiba coins mere months ago — for a total of under $1,000.
As with all markets, crypto traders follow trends. Dogecoin exploded, and the rush to find “the next Dogecoin” led to a bubble in memecoins that have become preposterously valuable. But while this is fun to watch from afar, it’s a perilous game to play yourself.
For one thing, scams are rife. Developers launch enticing projects, wait for traders to dump money in, and then vanish along with investor’s money, a trick called a “rug pull.” This happens constantly and doesn’t take long. On Tuesday, a coin called MoonDoge launched. It was live for four hours before the developer “rugged,” taking $133,000 (31 ether) of other people’s money with them.
But the even bigger peril is a shift in community sentiment. Since most traders are chiefly interested in making money, attention is fleeting. Another type of coin will explode, the meta of trading will change and the same meme coins that have multiplied 20 times over will collapse in value. One guy can’t turn $1,000 into $1.8 million without many others having a bad day somewhere along the way.
We saw hints of this on Wednesday, when Musk announced that Tesla would no longer accept payment in Bitcoin, citing environmental concerns. That caused the price of Bitcoin and Dogecoin to dip, with Dogecoin hitting a low of 38 cents. Shiba Inu coin took a fall too, after Vitalik Buterin, the founder of the Ethereum blockchain, donated $1 billion in Shiba to an Indian COVID relief fund. The altcoin’s price dropped by 35%.
Which takes us back to Dogecoin, the most valuable joke of all time. Its rise from 7 to 70 cents was staggeringly swift, and its fall to under 40 cents is seen by many as the beginning of the end. But don’t write off the doge just yet.
Elon Musk has said SpaceX will launch a Doge-1 satellite to the moon, a mission funded exclusively via Dogecoin payments. Dogecoin could very well tank further in the coming weeks, but Doge-1 will lift off in the first quarter of 2022.
That’s an eternity away in cryptocurrency markets — long enough for a coin to collapse, moon, collapse and moon again.