2022 continues to be a 12 months of surprises, with one of many greatest to date being Elon Musk’s determination to acquire 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 Large Tech censorship — it has additionally known as into query the way forward for Dogecoin (DOGE), a digital forex of which the billionaire has been a giant proponent during the last couple of years.
To place issues into perspective, simply hours earlier than Musk tweeted that “the chook 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 presently buying and selling near $0.08, its 30-day revenue ratio is bigger than 40%.
It’s also price noting that each time Musk has tweeted in help of the digital asset, its worth has skyrocketed fairly dramatically. For instance, all through 2021, he continued to refer to DOGE because the “individuals’s crypto,” a message that despatched the forex’s worth flying by a whopping 4,000% over the course of the 12 months.
Furthermore, Tesla — an American multinational automotive and clear vitality firm helmed by Musk — began accepting DOGE as payment for its merchandise in January 2022, together with its “Giga Texas” belt buckles and miniature car replicas. Moreover, Musk’s lately launched joke perfume, Burnt Hair, is also bought with DOGE.
A bleak future for DOGE?
To get a greater concept of whether or not Musk’s Twitter takeover and fixed help of DOGE stand to make an indelible mark on the digital forex’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 date, including:
“From paying an excessive amount of for Twitter to inflicting companywide mayhem by firing many good staff and making horrible administration selections such because the blue test episode, I’m not optimistic about both Twitter or Dogecoin.”
Moreover, he claimed he could be stunned if Musk can deliver any actual use circumstances to Dogecoin, noting that even when Musk intends to one way or the other combine Twitter with crypto funds — which is a really tough process — 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 a lot better blockchain options than Dogecoin to select from as regards to safety, privateness, good contracts and scaling,” he said.
Henry Liu, CEO of cryptocurrency change BTSE, informed Cointelegraph that after taking into account the present macroeconomic atmosphere, he foresees the value of DOGE persevering with to stay extremely unstable, a lot in step with the crypto market.
“We count on DOGE to remain speculative within the quick run, and there ought to be lowered liquidity and buying and selling volumes throughout varied platforms. If DOGE might be given new utility concerning its collaboration with Twitter, we could foresee a spike pushed by social media communities,” he stated.
Not everyone seems to be so skeptical
Nikita Zuborev, chief analyst for cryptocurrency change BestChange, informed Cointelegraph that whereas one can not low cost the truth that the expansion of meme tokens typically occurs instantly and unreasonably, Musk’s current acquisition of Twitter may doubtlessly increase DOGE’s worth, primarily as a result of one can not rule out the opportunity 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 types, reaching an enormous viewers within the course of. Such a metamorphosis will be capable of deliver the coin a number of use circumstances, 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 straight 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 major promoting level stays rooted in its meme-centric outlook, it might solely be sensible so as to add the forex to at least one’s portfolio simply to diversify it. Nonetheless, as a standalone funding, he doesn’t give a lot advantage to DOGE.
“Apart from Dogecoin, Musk has repeatedly spoken fairly positively about Bitcoin as properly, a crypto that’s way more steady and might be built-in into Twitter’s ecosystem simply. One can think about 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 truth
Due to Musk’s affinity for Dogecoin and his current takeover of Twitter, it stands to motive that hypothesis concerning the asset’s worth will run amok, no less than for some extra time. That being stated, the very fact stays that Dogecoin as a crypto mission remains to be fairly restricted in its operational utility, a sentiment echoed by Daniel Elsawey, co-founder and CEO of decentralized change TideFi.
Taking a extra holistic view of the matter, he informed Cointelegraph that cryptocurrencies within the digital asset area immediately fall into two distinct classes: these with good contract capabilities and people with out. In his opinion, the market as an entire is transferring 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 aspect or the opposite. He added:
“Provided that DOGE can not straight work together with good contracts as a part of its unique design, I’d say that except it’s particularly used as an possibility for fee, the use circumstances related will proceed to stay speculative.”
Lastly, provided that the crypto trade 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 current downfall of crypto change FTX, one thing that may have a direct impact on the value of most cryptocurrencies within the close to to mid-term. “Dogecoin is not any totally different on this respect. There’s nonetheless plenty of uncertainty surrounding the asset,” Elsawey concluded.
As we head right into a future pushed by a excessive diploma of financial turbulence — throughout a myriad of monetary sectors — will probably be fascinating to see how the way forward for Dogecoin performs out transferring ahead, particularly as tasks with restricted use circumstances proceed to be worn out from the market seemingly with every passing day.