Elon Musk’s Dogecoin tweet makes believers bark for more

The reckless abandonment of the investment world has a new fixation: A cryptocurrency that started out in 2013 as a joke, has been mostly forgotten, and thanks to a flurry of tweets from Tesla Inc. CEO Elon Musk, suddenly worth a total of over $ 6 billion.

It’s called dogecoin, a tribute to bitcoin that was designed to serve no real purpose. Dogecoin holders cannot buy much with it and cannot easily convert it to cash. For most of his life, virtual currency was traded for no other reason than to generate laughter online.

Dogecoin is named after an internet meme that surfaced almost ten years ago. The meme centered around the image of a Shiba Inu dog with bad spelling habits (hence doge instead of dog). Users have photographed the dog’s hairy face on everything from astronauts to Twinkies.

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In 2013, software developer Billy Markus watched bitcoin gain popularity and decided to create his own lightweight cryptocurrency. He first based it on the video game “Animal Crossing” and called it bells, named after the alleged game currency.

Internet users hated it, he says. So when another developer, Jackson Palmer, shared a new cryptocurrency idea based on the meme doge, Mr. Markus reconfigured his code to make the bells match the meme.

He decided to create a play so ridiculous that it could never be taken seriously. In return for solving math puzzles, dogecoin miners running fast-running computers were given between one dogecoin and hundreds of thousands of dogecoins.

The play had a fleeting moment of glory when it began. In 2014, his online supporters helped fund the Jamaican bobsleigh team’s trip to the Winter Olympics in Sochi, Russia, and sent a Nascar dogecoin runner to the Talladega Superspeedway in Alabama. Like most memes, it has lost its relevance.

Then came Mr. Musk. On January 28, he tweeted a fake cover of “Dogue” magazine.

Dogecoin has become a topic on WallStreetBets, the Reddit forum that incubated trading in GameStop Corp. At the end of January, the price of dogecoin rose to 8 cents from half a cent, where it had traded earlier this month.

The boss of billionaire Tesla tweeted about it again on Thursday, breaking off what he said was a hiatus from the social media platform. “No ups, no downs, only Doge,” he posted. Dogecoin immediately rose 80% per day, before parrying the gains.

Dogecoin’s network, maintained by volunteers, has struggled to accommodate the influx of buyers. The volunteers invested real money – in euros – to buy more server space.

Mr Markus, who is no longer working on dogecoin, couldn’t believe that the code he wrote in three hours on a Sunday was giving rise to a cryptocurrency worth billions of dollars in total market value.

“The idea that dogecoin is worth 8 cents is the same as GameStop is worth $ 325,” Mr. Markus, 38, said. “It doesn’t make sense. It’s super absurd. The design of the room was absurd.”

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Users can buy dogecoin with a credit card on cryptocurrency exchanges and trading platforms, including Robinhood Markets Inc.

Damian Wawrzyniak, chef at a restaurant in Peterborough, England, hadn’t heard of dogecoin until Mr Musk mentioned it. He quickly recovered some through a cryptocurrency brokerage account he used during the Covid-19 lockdown.

Dogecoin is “a completely strange name,” he said, but he thought Mr. Musk, who has around 45 million Twitter followers, added to his appeal.

In late January, a small cohort of protesters gathered outside Robinhood’s headquarters in Menlo Park, Calif., To protest the broker’s restrictions on trading in GameStop, AMC Entertainment Holdings Inc. and other companies. popular on Reddit.

As Dave Jevans, the CEO of crypto-analytics firm CipherTrace, passed on his way to the grocery store, a woman approached and encouraged him to join us.

“The deal is rigged,” she said.

“Buy bitcoin,” he joked.

“No, no, no,” she replied excitedly. “Buy dogecoin! Did you see it? I think we can get it for a dollar.”

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A group of voice shoppers on Reddit made this their mantra for pushing dogecoin to $ 1. The TikTok Investors Twitter account posted a video of a woman in purple workout gear singing about taking dogecoin “on the moon.”

In theory, it will be difficult for dogecoin to reach $ 1. Unlike bitcoin, which caps the number that can be mined at 21 million, dogecoin does not have such a limit. The rise of GameStop, however, has reminded investors that anything is possible.

The new cryptocurrency fervor has even found converts who once denigrated dogecoin. Angelicah Shaver, a 28-year-old graduate student who runs a cryptocurrency-focused YouTube channel, described it in a tweet in early January as “literally an insult to the tech community” since its inception.

But as the hype grew, she decided to use it as an opportunity to teach cryptocurrency newbies how to buy, sell, and analyze coins. She bought $ 1,000 worth of dogecoin in the last week of January, just before its price rose, and is holding onto her position.

“Fate loves irony, and it’s so true,” she said. “I have spoken out against dogecoin so many times. I have literally said dogecoin is an insult to technology, and here I am now holding this bag of doge.”