Elon Musk continues to dominate headlines, not only for his influential role in the cryptocurrency world with Dogecoin but also as a key figure in the United States’ newly established Department of Government Efficiency (ironically, the acronym is DOGE).
Both these endeavours have sparked discussions around financial stability, innovation, and risk.
Why is Dogecoin increasing?
Dogecoin, the meme-inspired cryptocurrency created in 2013 as a satire of Bitcoin, has surged by 130 per cent since the U.S. presidential elections, reaching almost $0.39 per unit, as reported by El País.
The cryptocurrency’s value has historically been closely tied to Musk’s actions and statements, with examples of dramatic price shifts in response to his public commentary:
- In 2021, Musk joked on Saturday Night Live that Dogecoin was “a hustle,” leading to a significant drop in its value.
- Later that year, Musk hinted on X that Tesla might accept Dogecoin as payment, causing a 33% price spike.
According to CoinMarketCap, today, Dogecoin (DOGE) is trading at approximately $0.4407 USD, with a 24-hour trading volume of around $20.97 billion USD (€20.14 billion). Its current market capitalisation stands at about $64.74 billion USD (€61.34 billion), ranking it as the seventh-largest cryptocurrency by market cap. Despite its origins as a joke, Dogecoin has built a strong community base, reflected in its motto, “Do Only Good Every Day.” However, experts warn of the risks associated with its volatility and overdependence on Musk’s public image.
In a report by El País, Jorge Soriano, CEO of Criptán, remarked, “If Elon Musk hadn’t talked so much about Dogecoin, I don’t think the currency would be where it is today” Similarly, Abel Peña of Bit2Me noted that linking Dogecoin’s value to Musk could hinder its adoption as a reliable asset.
DOGE: The acronym for cryptocurrency and government reform
In a weird twist, DOGE is now also the acronym for the Department of Government Efficiency, which Musk leads under re-elected President Donald J. Trump. The department aims to streamline federal inefficiency and slash spending. In a Bitcoin News report, Musk apparently claims it could save $2 trillion (€1.9 trillion), warning that the U.S. is heading towards “bankruptcy” without immediate action.
However, JPMorgan Chase has raised doubts about DOGE’s feasibility. In a recent report, the bank explained that while the department can propose reforms, ultimate control over spending lies with Congress: “The department can make all the suggestions it wants, but ultimately it’s the typical 60-vote majority in Congress that makes legislative changes,” as reported by Bitcoin News.
A report by Forbes notes that Trump’s administration has touted DOGE as essential for cutting red tape and restructuring federal agencies. However, questions remain about how much influence it can wield in practice, especially given Congressional roadblocks.
Is Elon Musk’s Dogecoin going to grow?
Musk’s dual role in Dogecoin and the Department of Government Efficiency highlights his significant influence across industries. However, experts warn that over-reliance on a single figure for both financial and political initiatives potentially introduces instability and risk. Carlos Salinas, a blockchain professor at Madrid’s IEB, cautioned, “Excessive dependence on a single figure is a sign of fragility in terms of the sustainability and maturity of the project.”
While Musk’s statements about Dogecoin often attract attention, experts like Salinas have warned that the cryptocurrency’s value remains vulnerable to market volatility. Just this morning, Musk posted on X saying, “I still can’t believe @DOGE is real” with two laughing emojis.
For now, both Dogecoin investors and U.S. political analysts are closely monitoring Elon Musk’s moves. His influence may bring opportunities for growth and reform, but it also comes with significant risks, making this a story worth watching for those with an interest in both the financial and political landscapes.
