Key Takeaways
Elon Musk’s connection with Dogecoin dates back to 2019, which we're all familiar with. From Elon's tweets to his support for 'joke' coin developers, the Musk Effect on DOGE is no secret.
Notably, Musk has contributed to Dogecoin's rise from under a penny to 69 cents during the GameStop rally in 2021. Fast forward to April 2023, the billionaire also changed Twitter's logo to a puppy meme. This led to a 31% DOGE price increase, reaching as high as 10 cents.
Over the years, Musk's consistent support has undeniably influenced DOGE’s market value while also adding to the demand for other similar dog-themed meme coins like Shiba Inu. But where does this support come from? Does it indicate Musk's favoritism for the meme coin or his DOGE holdings? Let's explore more in this detailed article.
Elon Musk: A Brief Profile
Musk was born to a South African father and a Canadian mother in 1971. To explore better work opportunities, Musk applied for a Canadian passport with the help of his Canadian-born mother. He believed it would be easier to move to America from Canada. And so, he moved from South Africa right after he received his Canadian passport in 1988.
Since then, Musk has added endless accomplishments to his name. From co-founding PayPal to establishing SpaceX — a manufacturer of launch vehicles and spacecraft — to being one of the first substantial investors in, and the CEO of, the electric vehicle firm Tesla. Not to mention his acquisition of Twitter (now named X) in April 2021. Because of his various accomplishments, Musk has gained immense recognition globally.
The Billionaire philanthropist has a huge following on Twitter, around 162.2M at the time of writing. Musk uses social media to frequently share his opinions with his followers — which includes his support towards Dogecoin. This is evident through his frequent Tweets hinting towards the dog-themed meme coin.
The Rise of Dogecoin
For many, it may seem like Elon has been supporting Dogecoin from the very beginning. However, that’s not true. In fact, this meme coin was launched years before Musk got familiar with it. Dogecoin was created as a prank rather than a serious financial goal in 2013.
The coin was inspired by the "Doge" meme, a prominent online meme showing a Shiba Inu dog that was recognized for its hilarious memes. But, only a few years after its launch and recognition, DOGE's creators, Markus and Palmer, left the Dogecoin project. But this wasn’t the end of Dogecoin.
Dogecoin continued to evolve and gain traction, setting the framework for its future as a well-known cryptocurrency brand. There are a few reasons that led to this recognition and popularity. The obvious one being Elon Musk's support, continuous appreciation, and acceptance of the meme coin in his companies. In addition to that, DOGE's popularity is due to its non-serious theme, which grabbed the interest of a large crypto community. Why is that?
While other cryptocurrencies were considered financial instruments, DOGE's approach of creating a humorous and lighthearted image made it a distinguishing feature for many people. This played to the coin’s success by making it approachable and relatable to the general public, increasing its popularity. This popularity has frequently helped DOGE reach the moon ever since its launch.
Specifically, the first 'to the moon' witnessed by DOGE was in May 2021, when the coin's value jumped from a fraction of a penny to about 74 cents. Ever since, there have been many notable price hikes and equal falls witnessed by DOGE.
Elon Musk's Relationship with Dogecoin
Coming to the connection between Elon Musk and Dogecoin, the American entrepreneur's endorsement of the meme coin over the years has helped the token touch the moon multiple times. Since Musk started supporting the token in 2019, Doge has seen various unexpected highs.
As an example, when Musk tweeted in April 2019, "Dogecoin might be my fav cryptocurrency," it led his followers to get more familiar with the token's existence. Decrypt, a cryptocurrency news tracker, found that searches for Dogecoin increased between 2019 and 2020. It is presumed that this increase in DOGE's recognition was around when Musk tweeted about it.
With that said, this wasn't the only time Musk tweeted or supported the token. Later, in 2021, he shared with his followers about working with Dogecoin's team since 2019 to strengthen its network. Soon after, DOGE reached an all-time high of 69 cents in the spring of 2021, a humongous increase from its recorded value of less than 1 cent in January.
Besides the positive impacts of Musk's DOGE endorsement, the entrepreneur has also led to the token's sudden price falls. For example, when Musk termed DOGE as a 'hustle' through his character sketch during his appearance on 'Saturday Night Live' in 2021, the token witnessed an unexpected decline.
Only a few days after joking about Dogecoin on "SNL," Musk shared on Twitter that SpaceX will launch a 'Doge-1' satellite to the moon and that the trip will be funded by the cryptocurrency. After this announcement, Doge recovered slightly with a 1.37% value increase.
But, there hasn't been a huge price surge for DOGE ever since. This incident proves that Musk's relationship with Dogecoin has not always been easy. But it's still strong, demonstrating Musk's continued support and belief in DOGE's potential.
Estimating Elon Musk's Dogecoin Holdings
Considering the stable and steady support of Elon for DOGE, it's easy to expect him to hold a huge amount of Dogecoin. But is it true? Well, that's hard to determine. Mainly, since crypto wallets are entirely private, it's hard for others to determine how much crypto a particular individual's wallet holds.
This privacy is achieved through these wallets' pseudonymity, which means they are tied to a public address that is difficult to track back to an individual or entity. This makes determining an individual's exact cryptocurrency holdings quite challenging.
With that said, we do however know that Musk holds at least some of this popular meme coin. How exactly? Well, in 2021, Musk tweeted about only holding Bitcoin, Ether, and Dogecoin. Previously, Musk had also tweeted: "Bought some Dogecoin for lil X, so he can be a toddler hodler," when referring to his son.
These tweets regarding Dogecoin have made the crypto community immensely curious about Musk's cryptocurrency holdings — with many assuming Musk has a considerable number of Dogecoin.
To add to this curiosity further, Business Insider shared in 2021 that a single digital wallet currently controls 36.7 billion Dogecoin. This made the online community speculate Musk to be the wallet's owner. Yet, despite all these assumptions and rumors, Musk has never clearly said how much Dogecoin he owns. So, there's no certainty about Musk's DOGE ownership.
The Impact of Musk's Holdings on the Market
As mentioned earlier, it's hard to determine how much DOGE Musk holds. Yet, what is certain is Musk's support for Dogecoin, which has considerably increased its popularity and worth over the years. Specifically, his tweets have generated short-term price increases and increased trading activity, highlighting the power Musk holds in the Bitcoin industry.
That is also a huge reason why many small-scale investors prefer holding cryptocurrencies endorsed by celebrities like Elon for a quick and high investment return. And why not? If such a renowned investor shows consistent faith in a 'joke' coin, there are still possibilities of many more price hikes that the token has yet to witness.
The Secrecy of Cryptocurrency Wallets
Since we can't determine Elon's exact DOGE holdings, it's important to understand why. Precisely, due to the anonymity of crypto wallets that promote privacy and safety, it is difficult to evaluate how much cryptocurrency a wallet holds.
These wallets maintain privacy by storing private keys generated during registration instead of the actual cryptocurrencies. Now, since crypto wallets don't store cryptocurrencies, it's challenging to determine the exact amount of assets purchased through them.
Conclusion
While evaluating Elon Musk's exact Dogecoin holding is nearly impossible, it's not hard to determine that Elon's consistent support towards this meme coin has had a huge impact on its value over the years. Yes, there have been certain price drops caused due to Elon's unfavorable endorsements.
With that said, these few incidents can easily be overlooked due to the frequent DOGE value surges Elon has initiated through his tweets and adoption as a payment option in Tesla. This proves that celebrity involvement has always had, and will continue to have, a significant impact on the crypto market.