Initially launched as a parody of crypto hypothesis, Dogecoin has since develop into the type of speculative asset it was meant to mock — largely as a result of Elon Musk’s affect. His social media exercise and public endorsements have performed a central and ongoing function in shaping DOGE’s trajectory.
BeInCrypto spoke with Erwin Voloder, Head of Coverage of the European Blockchain Affiliation, to debate how Musk blurred the strains between parody and promotion, main folks to assign real-world worth to a meme and producing moral considerations alongside the way in which.
The Genesis of Dogecoin
Towards the top of 2013, software program engineers Billy Markus and Jackson Palmer joined forces to create Dogecoin, the primary meme coin in crypto historical past. Its major objective was to function a lighthearted parody of the chaotic crypto hype.
Born from the “Doge” web meme, which prominently featured a Shiba Inu, the meme coin was meant as a humorous jab on the typically illogical nature of crypto hypothesis.
Regardless of its satirical origins, Dogecoin rapidly gained a devoted on-line following—a lot in order that even Tesla CEO Elon Musk grew to become drawn to it.
At the moment, he’s thought of a key determine in the neighborhood, and Dogecoin, opposite to its preliminary philosophy, has develop into a speculative asset.
“Musk’s involvement reworked Dogecoin from a satirical web token right into a speculative asset class by bestowing it with perceived legitimacy and leisure worth. His tweets and appearances turned Dogecoin right into a cultural product relatively than a monetary one—a type of efficiency artwork with actual financial penalties. The irony is {that a} coin created to mock irrational investing grew to become the poster little one of irrational investing,” Voloder instructed BeInCrypto.
Along with symbolic endorsements, Musk has exerted concrete affect. A primary instance is Tesla’s early 2022 choice to just accept Dogecoin for choose merchandise, considerably strengthening its place and indicating its sensible potential.
Musk additionally didn’t hesitate to make use of social media to convey his love for Dogecoin.
How Did Musk’s Tweets Influence Dogecoin’s Market?
All through the years, Elon Musk, a prolific Twitter person even earlier than he purchased the platform, has shared quite a few posts referencing Dogecoin. Every of those tweets has considerably impacted the meme coin’s visibility and worth efficiency.
When Musk referred to Dogecoin in an April 2019 tweet as his favourite cryptocurrency, the market went berserk. In two days, the coin’s worth went from $0.002 on April 1 to as excessive as $0.004.
Two years later, Musk’s X posts declaring “Dogecoin is the folks’s crypto” triggered an in a single day buying and selling quantity surge of over 50%.
Quickly sufficient, retail buyers began to comply with Musk’s endorsements mindlessly. Nevertheless it wasn’t all butterflies and roses. Musks’s unpredictable pronouncements additionally got here with excessive volatility.
“Musk blurred the road between parody and promotion, which led folks to assign real-world worth to a meme. With out him, it could have remained a distinct segment web joke however with him, it grew to become a logo of speculative absurdity,” Voloder stated.
When Musk referred to as Dogecoin ‘a hustle’ on Saturday Evening Dwell in Might 2021, the coin misplaced greater than a 3rd of its worth in a couple of hours.
“Dogecoin has no clear roadmap, no underlying yield or utility, and restricted growth exercise, that means its valuation is very sentiment-driven. In such an atmosphere, a single particular person’s actions can drive or destroy market notion, notably when that particular person is among the world’s most adopted and wealthiest folks,” he added.
Then, in January 2025, President Trump appointed Musk as the top of a newly created company tasked with chopping federal spending.
Musk referred to as it the Division of Authorities Effectivity, or D.O.G.E. for brief. The identify was intentional, and the web broke accordingly.
D.O.G.E. and the Value Plunge: What’s the Correlation?
President Trump launched the D.O.G.E. division by government order on his first day on the job. After D.O.G.E. launched its official authorities web site, Dogecoin’s worth surged by 13% in quarter-hour, breaking its earlier short-term downtrend.
But, for the reason that official institution of the Division of Authorities Effectivity, DOGE’s worth has been freefalling. Whereas valued at $0.36 on January 20, its worth has since fallen to $0.15 at this time.
Findings from a latest Finbold report have additionally revealed that Musk would possibly now be having the other impact on Dogecoin’s worth and sentiment.
In accordance with the info, the variety of Dogecoin millionaire addresses has plunged by over 41% between January 21 and March 31. In simply over two months, the cryptocurrency has decreased by 964 addresses.
Notably, the report indicated an enormous proportional decline within the variety of the wealthiest Dogecoin addresses. The depend of addresses holding $1 million to $9.99 million decreased by 40.21% in Q1 2025.
Much more considerably, the variety of addresses holding over $10 million plummeted by 47%, from 400 to 212.
Briefly, Dogecoin whales are dumping the token.
“Musk’s affect stays a key variable in Dogecoin’s valuation, and the timing of the drop in high-value addresses carefully aligns together with his D.O.G.E. announcement, suggesting a correlation. Nevertheless, attributing the whole reversal to Musk overlooks broader macro elements like rising rates of interest, tighter crypto regulation, and waning retail enthusiasm post-2021,” Voloder defined.
Regardless of the issue of assessing the exact impression of Elon Musk’s D.O.G.E. management on Dogecoin’s efficiency, his important affect on the cryptocurrency has develop into evident.
The moral concerns accompanying Musk’s affect have additionally develop into troublesome to disregard.
The Moral Considerations of a Billionaire’s Affect
In accordance with Voloder, the Dogecoin case illustrates the perils of parasocial investing, a habits by which folks mistakenly assign credibility to well-known personalities primarily based on their superstar standing or charisma.
It additional exhibits the damaging results of uncritical reliance on endorsements, probably resulting in substantial monetary losses for retail buyers.
The ethics of a billionaire influencing a unstable market like cryptocurrency additionally current important complexities.
“On one hand, Musk has the best to specific private views and take part in public discourse, together with round belongings like Dogecoin. On the opposite, his outsized affect signifies that his commentary can set off actual monetary hurt or euphoria in retail buyers who typically lack entry to classy danger fashions. Ethically, whenever you wield that type of affect, there’s a robust argument for assuming the next customary of accountability—particularly in a market with minimal guardrails,” Voloder instructed BeInCrypto.
Given the unregulated nature of the cryptocurrency trade, it’s at present difficult to pinpoint the diploma to which Musk’s actions might be held accountable.
Does Musk’s Affect Represent Market Manipulation?
Though offered as private opinions, Musk’s tweets demonstrably have an effect on Dogecoin’s worth, making a authorized grey space concerning potential market manipulation below US securities and commodities legal guidelines.
“Underneath SEC guidelines, market manipulation entails intentional conduct designed to deceive or defraud buyers by controlling or artificially affecting market costs. Whereas Dogecoin shouldn’t be formally deemed a safety, and thus exterior the SEC’s conventional remit, the CFTC might nonetheless scrutinize it below its anti-manipulation powers for commodities,” Voloder defined.
The Dogecoin case isn’t the primary time a high-profile determine has influenced markets in ways in which have been manipulative, although not explicitly unlawful.
Voloder highlighted two situations at totally different factors within the twentieth century: when distinguished banker JP Morgan steered markets in the course of the panic of 1907 and investor George Soros broke the Financial institution of England in 1992.
Although their maneuvers have been technically authorized, they managed to sway market outcomes. Nevertheless, this was the twentieth century, and their impression was proportionally a lot smaller.
“The distinction at this time is that social media supplies instantaneous attain to hundreds of thousands of buyers, amplifying the potential impression. So even when Musk’s tweets are framed as private musings, their predictable impact on worth might be seen as a type of market signaling—intentional or not,” Voloder instructed BeInCrypto.
In reality, the SEC and authorized specialists are already debating Elon Musk’s potential affect on Dogecoin’s monetary market actions.
A $258 Billion Lawsuit
Elon Musk at present faces a $258 billion class motion lawsuit for working a Dogecoin pyramid scheme.
The lawsuit, filed in June 2022, claims that Musk deliberately promoted Dogecoin by his tweets, public appearances, and media interactions, creating hype and driving up demand.
In accordance with the plaintiffs, this synthetic inflation of Dogecoin’s worth allowed Musk and his corporations to revenue whereas leaving different buyers with substantial losses when the worth inevitably declined.
As a result of SEC’s unclear authorized classification of cryptocurrencies like Dogecoin, Voloder anticipates a troublesome path for these claims in courtroom. However, the lawsuit signifies elevated consideration to market manipulation by influential figures.
“Nonetheless, the lawsuit indicators elevated authorized stress to outline the place promotional enthusiasm ends and monetary misconduct begins. If regulators or courts resolve Musk knowingly manipulated the market or misled buyers, he might face civil penalties or be compelled into settlements. The SEC’s earlier scrutiny of Musk’s Tesla tweets, leading to a consent decree, exhibits that regulators are keen to behave when market-moving speech crosses sure strains,” Voloder defined.
Musk’s affect on Dogecoin continues unabated, and the long-term results on the Dogecoin group stay a topic of debate.
The fast 40% lower in Dogecoin whale addresses inside two months has raised questions concerning the meme coin’s future energy and resilience.
Nevertheless, DOGE’s basic energy nonetheless stays intact – it’s group.
“Whereas the preliminary hype has light, Dogecoin nonetheless retains a loyal base of fans, lots of whom admire its meme-driven tradition, low transaction charges, and iconic branding. However the massive speculative crowd that originally drove its [all-time high] has largely left the sector in absence of sustained bullish narratives or significant tech upgrades,” Voloder concluded.
Sooner or later, merchants shall be watching to see if Dogecoin’s ‘cult following’ ultimately dwindles or if a robust group will maintain the ‘OG meme coin’.
Disclaimer
Following the Belief Undertaking tips, this function article presents opinions and views from trade specialists or people. BeInCrypto is devoted to clear reporting, however the views expressed on this article don’t essentially replicate these of BeInCrypto or its workers. Readers ought to confirm data independently and seek the advice of with an expert earlier than making choices primarily based on this content material. Please word that our Phrases and Situations, Privateness Coverage, and Disclaimers have been up to date.