Elon Musk explains ‘risks’ of moving to Mars
The cryptocurrency Dogecoin topped $10 billion (£7.28 billion) in market value following a flurry of new tweets from SpaceX and Tesla CEO Elon Musk, hip hop artist Snoop Snogg and Kiss lead singer Gene Simmons. This comes after the cryptocurrency surprised many after soaring almost 1,500 percent this year alone.
CoinDesk.com data indicates the meme-inspired digital token Dogecoin rallied 37 percent in 24 hours to mark a record high of $0.083745 (61p) at 3.20pm GMT (1020am ET) on Monday, February 8.
Traders and our customers should always do their own research and take their own advice
Bitfinex CTO Paolo Ardoino
Although Dogecoin actually started life as a “joke” in 2013, the minor altcoin has since become a meaningful cryptocurrency.
Mr Musk this weekend acknowledged that the two celebrities had joined him in boosting the cryptocurrency with a new tweet.
This involved posting an image, crudely re-working the famous Disney Lion King meme, building upon the one he sent last week.
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But instead of this time just featuring himself holding Shiba Inu – the dog at the centre of the doge meme, Sunday’s meme included Simmons and Snoop.
Elon Musk then proceeded to make several extraordinary claims about dogecoin – although it is impossible to currently ascertain whether these were said in seriousness or in jest.
Claims included dogecoin could one day be the “future currency of Earth”.
The controversial South African billionaire then asked his 41 million followers to vote on “Dogecoin to the Moooonn” or “all other crypto combined”.
The former option conclusively won 71.3 percent of the vote, after almost 2.5 million people had their say.
Elon Musk then tweeted yet again to announce: “The people have spoken”.
Paolo Ardoino, CTO at Bitfinex, however, suggests potential investors should take great care before spending their money on the back of celebrity endorsements.
He told Express.co.uk: ”The question of how Elon Musk’s comments impact Dogecoin is really a question for Elon Musk.
“Traders and our customers should always do their own research and take their own advice.
“Never trade with anything you are not prepared to lose entirely.
“Always review the risk disclosures. We don’t want people taking risks that they cannot afford and risking losses.”
Mr Musk has become particularly active in discussing both cryptocurrencies and traditional stocks in the time since the events around the GameStop share price.
The SpaceX head has previously been criticised for using his Twitter account to influence the financial markets.
Jason Cozens, Founder & CEO of Glint, says the practice of promoting cryptos “should be cause for concern”.
He said: These are highly volatile assets that can fluctuate hugely in value overnight, not failsafe get-rich-quick schemes – whilst investors may have enjoyed large returns in recent days, bitcoin’s double digit drops earlier this year should act as a warning.
These assets are subject to the whims of the market, and it’s important to note that 95 percent of all Bitcoin is owned by a five percent minority of ‘whales’, not on the popularity of whoever happens to be promoting them – for example, what would a major celebrity scandal do to the value of the crypto they’re promoting?”
American veteran rapper Snoop Dogg got become embroiled in the action after pinning a manipulated image of his some iconic album art, with his face replaced by an image of Shiba Inu – the dog at the centre of the doge meme.
Kiss frontman Gene Simmons enhanced his image of convert to crypto, with his own succession of Tweets.
Captioning an image presumably shot during his Kiss heyday, he Tweeted to this one million followers: “Woopie!!! @dogecoin skyrocketing…to the moon. HODLE!”
HODL is shorthand among cryptocurrency insiders for holding the crypto such as dogecoin instead of selling it.
Michael O’Rourke, CEO at blockchain data ecosystem Pocket Network, also urges extremely caution with news of today’s price spike:
He told Express.co.uk: ”For me Dogecoin exemplifies a new paradigm of the meme-fication of finance, whether crypto or traditional stocks.
“This is something we take for granted in crypto because literally everything except for BTC and ETH is purely narrative-driven.
For example, it’s clearly been difficult for traditional finance value investors to wrap their heads around the price of something like $GME when it’s so clearly disconnected from the usual metrics people use to value these sorts of things.
$TSLA was the canary in the coal mine for this and is the bane of the existence of many different types of investors because the P/E of an electric car company is so disconnected with it’s actual earnings.
“The disconnect exists because of memes, narrative, belief in the founders and products- these are what is driving the price of these assets.”
Kadan Stadelmann, CTO of blockchain solutions provider Komodo, added: “Although exciting, the dogecoin pump is an unsustainable push.
“The dogecoin blockchain produces 14 million coins per day. It does this by rewarding miners 10,000 coins per block every minute – a new block is produced at every one-minute interval.
“The goal of Dogecoin is to have built such a large supply that the 14 million it produces per day are a fraction of a percent of its total – making the supply that exists a very stable supply for value and transacting.”
“If DOGE were to make it to $1 as Elon Musk and other celebrities are saying and hold it, that would mean that a minimum of $14 million is spent buying DOGE per day plus buy pressures from sellers that bought lower or mined earlier are also being met.
“This is a very unlikely scenario. By comparison, 900 BTC are being produced a day and since the price is rising, this means $18 million a day is spent to buy Bitcoin as the leading currency in the crypto.”
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