2022 continues to be a 12 months of surprises, with one of many greatest to this point being Elon Musk’s choice to purchase social media juggernaut Twitter for a whopping $44 billion. Whereas the takeover has set into movement an entire host of debates — notably these pertaining to Massive Tech censorship — it has additionally known as into query the way forward for Dogecoin (DOGE), a digital foreign money of which the billionaire has been an enormous proponent over the past couple of years.
To place issues into perspective, simply hours earlier than Musk tweeted that “the chicken is freed” on Oct. 27, the value of DOGE was hovering round $0.07. Nonetheless, by Nov. 1, it had surged to $0.16, bringing the entire market capitalization of the so-called memecoin to a large $21 billion. And whereas DOGE is at the moment buying and selling near $0.08, its 30-day revenue ratio is larger than 40%.
It is usually value noting that each time Musk has tweeted in assist of the digital asset, its worth has skyrocketed fairly dramatically. For instance, all through 2021, he continued to confer with DOGE because the “individuals’s crypto,” a message that despatched the foreign money’s worth flying by a whopping 4,000% over the course of the 12 months.
Furthermore, Tesla — an American multinational automotive and clear power firm helmed by Musk — began accepting DOGE as fee for its merchandise in January 2022, together with its “Giga Texas” belt buckles and miniature automobile replicas. Moreover, Musk’s just lately launched joke perfume, Burnt Hair, may be bought with DOGE.
A bleak future for DOGE?
To get a greater thought of whether or not Musk’s Twitter takeover and fixed assist of DOGE stand to make an indelible mark on the digital foreign money’s monetary future, Cointelegraph reached out to Lior Yaffe, co-founder of Switzerland-based blockchain software program firm Jelurida. Yaffe doesn’t have an excessive amount of religion in Dogecoin, judging from the poor decision-making displayed by Musk to this point, including:
“From paying an excessive amount of for Twitter to inflicting companywide mayhem by firing many good staff and making horrible administration choices such because the blue verify episode, I’m not optimistic about both Twitter or Dogecoin.”
Moreover, he claimed he could be shocked if Musk can deliver any actual use instances to Dogecoin, noting that even when Musk intends to one way or the other combine Twitter with crypto funds — which is a really troublesome job — he doubts they are going to be capable of obtain such a dream within the close to future. “Even when they do handle to construct a fee system round Twitter, there are significantly better blockchain options than Dogecoin to select from close to safety, privateness, good contracts and scaling,” he said.
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Henry Liu, CEO of cryptocurrency alternate BTSE, instructed Cointelegraph that after bearing in mind the present macroeconomic atmosphere, he foresees the value of DOGE persevering with to stay extremely risky, a lot in step with the crypto market.
“We count on DOGE to remain speculative within the quick run, and there needs to be decreased liquidity and buying and selling volumes throughout varied platforms. If DOGE might be given new utility relating to its collaboration with Twitter, we might foresee a spike pushed by social media communities,” he stated.
Not everyone seems to be so skeptical
Nikita Zuborev, chief analyst for cryptocurrency alternate BestChange, instructed Cointelegraph that whereas one can’t low cost the truth that the expansion of meme tokens usually occurs abruptly and unreasonably, Musk’s latest acquisition of Twitter may doubtlessly increase DOGE’s worth, primarily as a result of one can’t rule out the potential of the asset being built-in into the agency’s social community ecosystem sooner or later. He added:
“If that occurs, then the beforehand ineffective memecoin will flip into the platform’s central management token of kinds, reaching an enormous viewers within the course of. Such a change will be capable of deliver the coin a number of use instances, one thing that many buyers are betting on.”
To additional strengthen his argument, Zuborev pointed to the upcoming launch of the SpaceX-backed Doge-1 lunar satellite tv for pc, which is instantly associated to the model of the coin. “These sorts of strikes stand to impress excessive demand in DOGE’s market and worth progress,” he claimed.
That being stated, he did concede that so long as the asset’s main promoting level stays rooted in its meme-centric outlook, it will solely be smart so as to add the foreign money to 1’s portfolio simply to diversify it. Nonetheless, as a standalone funding, he doesn’t give a lot benefit to DOGE.
“In addition to Dogecoin, Musk has repeatedly spoken fairly positively about Bitcoin as nicely, a crypto that’s way more secure and might be built-in into Twitter’s ecosystem simply. One can take into account it as a substitute for DOGE, particularly to capitalize on Musk’s continued market manipulations,” he stated.
DOGE’s utility remains to be minimal, and that’s a reality
Due to Musk’s affinity for Dogecoin and his latest takeover of Twitter, it stands to cause that hypothesis relating to the asset’s worth will run amok, a minimum of for some extra time. That being stated, the very fact stays that Dogecoin as a crypto undertaking remains to be fairly restricted in its operational utility, a sentiment echoed by Daniel Elsawey, co-founder and CEO of decentralized alternate TideFi.
Taking a extra holistic view of the matter, he instructed Cointelegraph that cryptocurrencies within the digital asset area in the present day fall into two distinct classes: these with good contract capabilities and people with out. In his opinion, the market as an entire is shifting towards the tokenization of things in our day-to-day lives, and that is what stands to tip the adoption curve of digital belongings towards one facet or the opposite. He added:
“On condition that DOGE can’t instantly work together with good contracts as a part of its unique design, I’d say that until it’s particularly used as an possibility for fee, the use instances related will proceed to stay speculative.”
Lastly, provided that the crypto business remains to be in its relative infancy, it continues to stay closely depending on Bitcoin (BTC), tracing its worth actions fairly closely. Furthermore, volatility continues to pervade the market because of the latest downfall of crypto alternate FTX, one thing that may have a direct impact on the value of most cryptocurrencies within the close to to mid-term. “Dogecoin isn’t any totally different on this respect. There may be nonetheless plenty of uncertainty surrounding the asset,” Elsawey concluded.
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As we head right into a future pushed by a excessive diploma of financial turbulence — throughout a myriad of economic sectors — it is going to be fascinating to see how the way forward for Dogecoin performs out shifting ahead, particularly as initiatives with restricted use instances proceed to be worn out from the market seemingly with every passing day.
