Words: Tom Ward
On Saturday 8th May, Tesla CEO Elon Musk made history as the first person with Asperger’s syndrome to host Saturday Night Live. This announcement, made during his opening monologue, was met with enthusiastic applause by the studio audience.
Unfortunately, not every aspect of his hosting gig met with the same reaction. Towards the end of his opening skit Musk’s mother, Maye Musk appeared to ask what her son had got her for Mother’s Day, joking “I just hope it’s not Dogecoin!”
“It is,” her son replied. “It sure is.”
Dubbed ‘The Dogefather’ for his vivacious backing of the cryptocurrency, many predicted that Musk would use his SNL appearance to talk up the coin and that this in turn would see its value rocket.
Unfortunately, the opposite happened. In a later segment in the SNL broadcast, Musk appeared again, playing a character struggling to explain what Dogecoin is. In the end, he admitted it’s “a hustle”.
Whether they missed the joke or simply didn’t find it funny, investors reacted adversely to Musk’s appearance and began selling off Dogecoin. By Sunday it hit a low of just 44 cents, down from 70 cents which it was trading at when the market opened on Saturday (there was a dip to 66 cents before SNL aired at 11.30pm E.T.).
Having dropped by 29.5 percent during Musk’s appearance to stabilise at a loss of 40 percent by Sunday, the failed plug demonstrates just how volatile cryptocurrencies can be.
Elon Musk’s SNL appearance drastically dented Dogecoin’s rise
But, at the same time, even Elon Musk himself may be unable to disrupt Dogecoin’s stratospheric rise. Writing for CNN Business, David Goldman noted that “Dogecoin has been on an absolute tear this year.”
He isn’t wrong. The currency is up more than 12,000 per cent since January and, according to Coinbase, is now the fifth largest cryptocurrency in the world, with a value just under $70 billion. Which isn’t at all bad for something which began as a joke.
So, what’s next for Dogecoin, and do you need to invest?
"Driven by teens and the TikTok crowd, in 2021 it has become one of the leading cryptocurrencies in the world..."
Dogecoin had an unusual start, even for a cryptocurrency. It was founded in 2013, by software engineers Billy Markus and Jackson Palmer as a way of satirising cryptocurrencies like Bitcoin and its competitors. Even its name – a tongue-in-cheek reference to the ‘doge’ meme populating the online sphere back then – implied that this was not a currency that took itself too seriously.
Driven by teens and the TikTok crowd, in 2021 it has become one of the leading cryptocurrencies in the world. And, despite the recent dip, it’s potential could be limitless; unlike Bitcoin, which has a supply of 21 million coins, no such limit has yet been placed on Dogecoin, meaning its supply could be infinite.
It’s unclear when Elon Musk became interested in Dogecoin, but (alongside Snoop Dogg and Gene Simmons) he remains one of its most vocal supporters (incidentally, Tesla just announced it will stop accepting Bitcoin payments over concerns around that cryptocurrency’s environmental impact – but more on that later).
It’s not unusual for Musk to shill Dogecoin’s benefits to his 50 million Twitter followers like he did in April when he tweeted ‘Doge Barking at the moon’, or before his SNL appearance when his (now deleted tweet) ‘To the moon’ sparked frenzied excitement among Dogecoin converts.
Yet the unorthodox CEO has also urged caution among his followers, sharing a video in which he explained that while cryptocurrency has a ‘good chance’ of becoming ‘the future currency of the Earth.’
Musk isn’t the only Dogecoin enthusiast. Reassuringly (depending on how much stock you invest in Musk’s outlook), Galaxy Investment Partners CEO Michael Novogratz recently told CNBC that:
“When you think about the whole spirit of what this crypto revolution is, there’s something pure in what dogecoin has done…It’s a little bit of a middle finger to the system. People are unhappy with the current financial system. They just are.”
As for the future of Doge, Novogratz was less certain. With the cryptocurrency largely backed by Gen Z investors, Novogratz likens it to a flash in the pan.
Mark Cuban — the billionaire entrepreneur — tweeted that Dogecoin can evolve into a “usable currency”.
“I’m not participating on the long side,” Novogratz told CNBC. “It is literally just a store of value for this group of young millennials and Gen Z. I worry that once the enthusiasm rolls out, there’s no developers. There’s no institution coming in, but it’s got the moniker of ‘the people’s coin’ right now.”
Novogratz’s concerns may well be valid – and the post SNL fluctuation certainly shows it is volatile. But Doge has already established itself as a currency with real world value.
Mark Cuban — the billionaire entrepreneur and owner of the NBA club the Dallas Mavericks — tweeted that Dogecoin can evolve into a “usable currency”.
The Mavericks already accept payment in Dogecoin and with Bitcoin on the outs at Tesla, it looks like Musk is lining up Doge as a replacement; on the 11th May, Musk tweeted asking his followers if they would like Tesla to accept ‘Doge’. The response (78.2 percent) was overwhelmingly in favour of the move.
Yet if Doge is to have a future – especially at Tesla – then its environmental impact has to be reckoned with.
Bitcoin is estimated to use the same amount of energy as an entire year’s energy usage by Malaysia, which is what prompted Must to tweet that:
“We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel… Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”
Thanks to the University of Cambridge’s Centre for Alternative Finance, it is possible to see how various cryptocurrencies stack up in terms of emissions. The Centre estimates that Bitcoin mining uses 707 KWh. Litecoin and Ethereum were at 18.522 KWh and 62.56 KWh respectively. By far the greener of the pack is Dogecoin, at 0.12 KWh.
"Bitcoin is estimated to use the same amount of energy each year as the entirety of Malaysia..."
Of course, not everyone is interested in cryptocurrency’s environmental impact. For many, it is another gamble, a way to supplement their stock portfolio and make their money work for them. Another recent story proved that when it comes to striking it rich on crypto, it could be you.
The same day as Musk’s tweet newspapers delighted in reporting the story of Goldman Sachs’s London managing director and head of emerging market sales Aziz McMahon who quit his job after making millions of pounds from investing in Dogecoin, making him the personification of every single investor’s wildest dreams.
Whether or not Dogecoin does ascend all the way to the lofty heights of the moon one thing is for certain: it’s going to be an interesting ride.
Read next: How to speak like a modern master of the universe
Become a Gentleman’s Journal Member?
Like the Gentleman’s Journal? Why not join the Clubhouse, a special kind of private club where members receive offers and experiences from hand-picked, premium brands. You will also receive invites to exclusive events, the quarterly print magazine delivered directly to your door and your own membership card.
