In 2021, Dogecoin gained popularity thanks to regular mentions in Elon Musk’s tweets. Experts Explain Long-Term Expectations for Digital Coin.
Dogecoin was created in 2013, but gained real popularity in the first half of 2021. The digital coin even managed to enter the ten largest cryptocurrencies in terms of capitalization. As of July 5, Dogecoin capitalization, according to CoinGecko, is $ 30 billion.
What happened to altcoin in early 2021?
The rapid growth of the digital coin began in February, when the head of Tesla and SpaceX Elon Musk began to mention the token in his tweets. For the first time, the paths of Musk and cryptocurrency “crossed” in 2019 – then the businessman wrote on Twitter that Dogecoin could become his favorite cryptocurrency. And since February 2021, not a month has passed without Musk mentioning Dogecoin in his tweets.
Dogecoin might be my fav cryptocurrency. It’s pretty cool.
— Elon Musk (@elonmusk) April 2, 2019
The billionaire reported that he bought Dogecoin for his son, and also offered large altcoin holders a reward for emptying their accounts. According to Musk, the focus of coins on a small number of wallets is Dogecoin main problem.
— Elon Musk (@elonmusk) February 10, 2021
I will literally pay actual $ if they just void their accounts
— Elon Musk (@elonmusk) February 15, 2021
In March, during the surge in popularity of non fungible tokens (NFT), Musk decided to sell his own NFT token. The entrepreneur set the price in Dogecoin, but later changed his mind about selling the token.
i’ll give you $69M for it. https://t.co/DMd4EEOGCZ
— beeple (@beeple) March 15, 2021
In April, Musk named himself “Doge father” when announcing his appearance as a co-host on Saturday Night Live .
The Dogefather
SNL May 8— Elon Musk (@elonmusk) April 28, 2021
In May, the head of Tesla conducted a poll among his followers on Twitter. He wondered if it was worth adding Dogecoin to the payment methods for buying the company’s electric vehicles. Almost 4 million people took part in the voting, and 78% of them answered in the affirmative.
Do you want Tesla to accept Doge?
— Elon Musk (@elonmusk) May 11, 2021
In June, the entrepreneur supported the proposal of Dogecoin developers to update the network, within which transaction fees could be reduced by 100 times. Musk managed to mention the digital coin in early July.
Important to support
— Elon Musk (@elonmusk) June 28, 2021
He responded to rumors about whether it would be possible to mine Dogecoin on the Tesla supercomputer, which is currently in development, and also posted several memes about the altcoin.
Sorry for any confusion. Dojo is a neural network training computer optimized for video (for self-driving).
Unless there is a predictable pattern to hashing Scrypt (which we will not attempt to find), it will not be competitive with ASIC-based hashing.
Potatoes are delicious!
— Elon Musk (@elonmusk) July 1, 2021
After the mention of Dogecoin by Elon Musk, the coin, as a rule, rose sharply in price. By May 8, its rate reached a historic high of $ 0.73 (plus 18,150% since the beginning of the year).
But after the collapse of the cryptocurrency market, which occurred on May 19, the quotes of the digital coin went down. Dogecoin price fell to a local low of $ 0.16 on June 22. As of July 5, the altcoin is trading at $ 0.23. The digital coin has dropped 68% since its peak in May.
Dogecoin prospects
In terms of technology and value for the community, Dogecoin has never been promising, it is an example of an absolutely speculative asset, says Nikita Zuborev, senior analyst at BestChange.ru.
According to him, altcoin has only one function – the transfer of value, unlike other top tokens, most of which have specific features in technology, pegging to assets, serious development teams, payment infrastructure and much more.
“Dogecoin is more centralized, large holders have accumulated a significant part of tokens on their wallets, the transfer protocol is not updated, no new technologies or algorithms are used, this is an anti-example of creating cryptocurrency projects,” the analyst noted.
According to Zuborev, in the long term, the token is of no value, most likely it will disappear from the market, like most of the cryptocurrencies existing today.
The crypto market is very tired of endless manipulation of the Dogecoin rate and has gained some resistance to Elon Musk‘s tweets, says Maria Stankevich, Development Director of the EXMO crypto exchange.
In traditional finance and in other markets, market manipulation is prohibited and punishable by insane fines and threatens to close the company, the expert recalled.
Therefore, now, given the complete absence of such legislation, the market independently – unconsciously – began to regulate this issue, added Stankevich.
**Musk explains the impossibility of mining Dogecoin on the Tesla supercomputer
