With Elon Musk taking a seat on Twitter’s board, the joke is perhaps over for crypto favourite memecoin.
Dogecoin, which makes use of the image of a Shiba Inu canine widespread with meme mills, owes its existence as something apart from a distinct segment cryptocurrency to Musk, who began tweeting pro-dogecoin jokes final yr to his huge Twitter fan base.
However with the Tesla and SpaceX founder’s buy of 9.2% of Twitter and ascendance to the social media large’s board of administrators, there’s the true chance that it might choose up an precise utility as a funds token to help its almost $20 billion market capitalization.
Simply as potential is that its champion, who has run afoul of the Securities and Change Fee (SEC) for joke inventory value tweets, might be silenced.
The issue is straightforward: Musk owns dogecoin, which fits by DOGE on exchanges, and his tweets are likely to trigger enormous value bumps (and the occasional crash). They do the identical for bitcoin, which transfer by billions of {dollars} in worth in response to his social media updates.
With the Twitter board seat bringing renewed — and certain unfriendly — consideration from the SEC, dogecoin may need to face by itself 4 legs, that are mighty shaky.
Except for the ten% value bump from the Twitter announcement, the longer-term potential increase is determined by how a lot he actually likes dogecoin. Underneath now-departed CEO Jack Dorsey, an intense bitcoin supporter, Twitter final yr allowed customers to tip with BTC. Not too long ago, the social media large introduced plans to permit homeowners of NFT collectables like CryptoPunks and Bored Ape Yacht Membership tokens to make use of them as their profile footage, full with a particular border verifying possession.
However Dorsey was a bitcoin maximalist, which means he would solely permit BTC into Twitter’s tent. If Musk sways the board into permitting dogecoin tipping — and probably funds down the street — it might give the extensively derided memecoin some chunk so as to add to its outsize bark.
Who’s Laughing Now?
Dogecoin started as a Twitter joke — actually. Its Australian co-creator, Jackson Palmer, has stated it was inbuilt a few hours after an American software program engineer named Billy Palmer replied that they need to make it occur.
“So mainly what occurred was that I form of got here up with a reputation and concept after which we brainstormed over the subsequent few days,” Palmer stated. “We had been, like, how will we make this as ridiculous as potential? So how will we make it as undesirable as a cryptocurrency in order that it doesn’t change into critical?”
For instance, miners obtain a random block reward of zero to 1 million DOGE for verifying a block of transactions and writing them onto the blockchain.
At the moment the Twelfth-largest cryptocurrency with a market cap of $20 billion, dogecoin raised a chuckle and a small however intense following in 2013, with a value of some thousandths of a cent till January 2021.
Then Musk joined in, with tweets like this “Lion King”-themed meme of the scene when Rafiki presents child Simba to the group — with Musk’s personal face superimposed on Rafiki and a dogecoin over Simba’s.
ur welcome pic.twitter.com/e2KF57KLxb
— Elon Musk (@elonmusk) February 4, 2021
The dogecoin value chart appears to be like like an unlimited plain with the sudden eruption of mountains in January 2021.
Since then, DOGE has gotten extra credibility as a funds coin, utilized by crypto funds processor BitPay, accepted at AMC theaters, and, after all, usable for getting Tesla merchandise (however not automobiles).
See extra: Tesla Prospects Can Now Pay With Dogecoin… for Equipment, Not Vehicles
The joke was additionally on each Palmers (no relation), neither of whom saved their preliminary dogecoin holdings.
No Laughing Matter
Musk, usually a prolific tweeter, posted solely twice on Monday (April 4), when his stake was disclosed, saying “Oh hi lol” and posting a ballot asking if Twitter ought to add an edit button. On Tuesday (April 5), he reposted a SpaceX tweet — and nothing since.
That implies the boards of SpaceX and Twitter have clamped down onerous — particularly after he once more ran afoul of the SEC by failing to reveal his months-long Twitter buy throughout the required 10 days, CNBC famous.
In spite of everything, Musk’s feud with the SEC has run for years, ever since a September 2018 joke on Twitter that he had secured funding to take Tesla personal at a marijuana-themed $420 a share. Regulators fined Musk and the electrical automotive maker $20 million every, pressured him to step down quickly as chairman and mandated firm oversight of any business-related tweets.
Am contemplating taking Tesla personal at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The SEC has since accused him of violating that final provision a number of occasions.
Musk, for his half, has made unflattering tweets concerning the company, calling it the “shortseller enrichment fee” in 2018 and including a fairly extra vulgar comment in July 2020.
As for dogecoin, the issue is that Musk owns an unspecified quantity of DOGE himself and famously tweeted in February 2021 that he had purchased some for his toddler son, in order that he could be a “toddler hodler” — taking part in on the crypto business meme phrase “hodl,” which means refusing to promote bitcoins (and different tokens) within the perception that the value will skyrocket.
Purchased some Dogecoin for lil X, so he could be a toddler hodler
— Elon Musk (@elonmusk) February 10, 2021
That Feb. 10, 2021 toddler hodler tweet precipitated dogecoin’s value to spike 13%.
As for the legality of his crypto tweets, the well-known crypto detractor and economist Nouriel Roubini informed CoinDesk that Musk had engaged in market manipulation with private tweets that jacked up the value of BTC earlier than saying in February 2021 that Tesla had purchased $1.5 billion value of bitcoin — which precipitated one other value spike.
“The SEC needs to be seeking to those who have a market impression that manipulate the value of property,” Roubini opined on CoinDesk TV in February final yr. “That’s additionally prison conduct.”
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