Elon Musk, the billionaire heading Tesla, SpaceX, and X, has evidently maintained a strong support for the Dogecoin – a crypto asset that was developed in 2013 as a joke by software engineers Jackson Palmer and Billy Markus. In the past, Musk has endorsed Dogecoin as the “people’s crypto” – pitching it as a better crypto token for day-to-day utility compared to Bitcoin.
Now that Elon Musk has reportedly decided to take a break from being involved in the Trump administration, launched his own political party called the “America Party”, and has decided to dedicate more time to his companies, CoinHeadlines reached out to industry analysts to ascertain the true extent of Dogecoin’s reliance on the so-called “Musk mania” for its market reputation.
Speaking to CoinHeadlines, Saravanan Pandian, the CEO and Founder of the KoinBX crypto exchange said the confidence of investors on DOGE does hinge on Musk’s support for the token to some extent.
“Musk has been ardently vouching for Dogecoin’s hype and utility. If he were to pull his support, the token could see a major price drop due to panic selling. Minus his hype, retail interest could quickly decline,” Panidhan noted.
Varun Sethi, the founder of the Wyoming, US-based legal firm Blockchain Lawyer LLC predicted that Musk’s dissociation with DOGE could bring the project’s long-term viability under question. Both Pandian and Sethi, however, believe that if Musk was to withdraw his support, DOGE developers could be compelled to step away from the hype and improve the project.
“A substantial portion of Dogecoin’s market capitalization is correlated with sentiment driven by Musk. If he were to halt his support, it would necessitate DOGE developers to cultivate an ecosystem supported on intrinsic value, independent of any single promoter’s influence – making it a professional and truly decentralised project that it endeavours to be,” Sethi told CoinHeadlines.
Musk grew into his “Dogefather” image after he started frequently posting about the token on X (formerly Twitter). He even went on to call Dogecoin his favourite cryptocurrency. The billionaire’s interest in DOGE became a major factor in drawing the attention of investors towards the token, which was launched in December 2013 with a next-to-nil price of around $0.00026.
In the last few months, Musk continued to post about Dogecoin on X, either directly or sometimes indirectly through his “Department of Government Efficiency” (D.O.G.E.) initiative set up in the US under President Donald Trump’s presidency.
Sudhakar Lakshmanaraja from Web3 skill development platform called the Digital South Trust believes that the developers behind DOGE must soon find a real-world utility for the token to protect it against being tagged as a “speculative” asset without Musk’s influence.
As of Friday, July 11, Dogecoin is trading at $0.1975 after clocking a spike of 8.26 percent in the last 24 hours. Presently, a total of 150.04 billion DOGE tokens are in circulation, data by CoinMarketCap shows. The market cap of DOGE, as of Friday, stands at $29.64 billion.