For many people, Dogecoin (DOGE) is many things. A chance to win a lot of money and make a fortune, according to some, is their golden ticket. Others see it as a way to join a fun group of people. The self-described Dogefather and billionaire Elon Musk have his motivations. In the beginning, he stated that he liked Dogecoin because fate favors irony and the most ironic outcome would be for a joke cryptocurrency to become the future currency.
He now claims that he is only supporting it because less fortunate individuals have asked him to. “I just know a lot of people who are not that wealthy who, you know, have encouraged me to buy and support Dogecoin,” Musk stated to Bloomberg in June. Honestly? Donate to charities if you want to assist those who are less fortunate than you are. Don’t pump an investment with a high risk.
The Musk impact
A few VIPs got on board with the DOGE fleeting trend however none have been very pretty much as committed as Musk, who’s been tweeting about Dogecoin beginning around 2019. DOGE’s cost arrived at its record-breaking high right away before Musk showed up on Saturday Night Live last May. The pre-show craze drove its cost to an impractical level. It has never recuperated.
On May 6, 2021, a $500 purchase of DOGE would be worth approximately $50 today. Over 90% of the token’s value has been lost since its peak. Additionally, IntoTheBlock’s data indicate that just under half of Dogecoin owners are losing money on their investments. This indicates that their assets are worth less than what they paid for them initially.
The price of other cryptocurrencies is also falling. However, cryptos that were planned given a reason have a vastly improved possibility of possible recuperation. In contrast to, say, Bitcoin (BTC) and Ethereum (ETH), Dogecoin doesn’t have a lot of in that frame of mind of utility.
There are no assurances, and even crypto giants face challenges of their own. However, given that doge-coins prices did not follow the trend of many other prominent cryptocurrencies, which reached new highs in November, it is difficult to imagine how investors will ever recoup their losses.
An uplifting story: A prominent Dogecoin retail investor is optimistic that the good times will resume. Glauber Contessoto, who goes by the moniker “SlumDoge Millionaire,” spent $188,000 of his entire life’s savings to acquire DOGE in February 2021. He bought the token by selling the stocks in Uber and Tesla. And he did so in part as a result of Musk’s promotion on social media.
His holdings were worth almost $3 million in a matter of months. Contessoto turned out to be generally a banner kid for the normal individuals who’d become wildly successful with Dogecoin. He stated in interviews with the New York Times and other publications that he did not intend to sell. Not at all.
Recently, he stated that his holdings were approximately worth $230,000 and acknowledged that he regretted not taking profits. He wrote in a Newsweek article, “While I’m still up on my initial investment, what I do regret is not taking out some of the profit as cash.” I probably would have taken out $1 million or $500,000 if I could go back in time.” He still believes DOGE will recover.
Even if they break even, other investors cannot say so. Musk makes them feel betrayed. A $258 billion lawsuit has been filed against Musk and several of his businesses. Initially postponed by one disappointed financial backer, different financial backers have now joined the fight. According to the lawsuit, investors in Dogecoin have lost more than $80 billion, and Musk promoted Dogecoin as a legitimate investment “when it has no value at all.”
Is Dogecoin sustainable?
Dogecoin has advanced significantly. The token, which was initially created as a joke, now has a market cap of $8 billion, and the Dogecoin Foundation is working hard to retroactively engineer a purpose for the crypto. On the plus side, the foundation has made some progress on several fronts and is a well-known brand, more so than many other digital currencies.
As a means of payment, Dogecoin might catch on. For instance, the foundation is working to get its trademark registered and to push through necessary technological advancements. However, it faces stiff competition from both within and outside the crypto industry.
The United States government, for instance, is contemplating its digital currency. Payment cryptos may be in jeopardy from these so-called go coins or central bank digital currencies (CBDCs). Many of Bitcoin’s original ideas would be challenged by CBDCs. However, they would also provide many of the advantages, including fast transactions and low fees, without the volatility and risk.
Musk boasts that he will continue to back Dogecoin for the people. However, he is not assisting the Dogecoin Foundation in actually developing the coin’s future. It was initially said that one of his guides, Jared Birchall, would address Musk on the establishment’s warning board. Yet, Musk tweeted that this isn’t true, and neither he nor Birchall has any associations with the association.
Don’t gamble with a high-risk cryptocurrency if you only have a small amount of money. Look for investments with low risks that can help you build wealth over time. It is one thing to purchase cryptocurrency and hold a small amount as part of a balanced portfolio; however, it is quite another to invest completely in Dogecoin due to Elon Musk’s tweets about it.
In conclusion, Musk was a major factor in driving the price of a useless token to unsustainable heights. Dogecoin’s recovery is possible, but highly unlikely. Now, the entire industry faces a difficult challenge. Not only does Musk not contribute much to Dogecoin’s success, but it also lacks solid foundations.
Sadly, the retail investors who got caught up in a billionaire’s frenzy will lose their hard-earned money in the end. Because of this, Musk’s message that he is “doing it for the people” is not only wrong but also morally questionable.
