The First & Original Memecoin
Dogecoin is almost 10 years old now and what started out as a joke is now a top Crypto project, at least by market cap valuations. Doge has gone on to make early investors extremely wealthy and cause haters to literally turn green with envy. However, development on the project is very slow, if any, and the project’s creator has since abandoned it. This was seen as an opportunity by Elon Musk, who jokingly referred to himself as the CEO of Doge back in 2019. Musk seems to have a strange fascination and obsession with Doge dating back some time. In 2018 and 2019 I experienced a strong conviction that Doge would hit $0.07 during the next bull market. Well, the bull market arrived and what I thought at the time was a rather hefty target was attained very early on in the cycle. Doge went on to basically 10X my price prediction.
The Elon Effect
I think we can all agree that without Elon, Doge would have never reached $0.73 at the peak of the bull market. What transpired in 2021 has now changed the entire dynamic of Doge. The community has always been committed, despite a lack of commitment from the creator, Jackson Palmer. However, what gives Doge its value now is quite simply, Elon. In a similar way that Michael Saylor’s MicroStrategy is basically a BTC investment product, Doge is an indirect investment in Elon Musk. Betting on Doge now is the equivalent of betting on Musk. Doge’s value is now strongly correlated to Elon.
The Satoshi Effect
I wrote about the psychology of Satoshi Nakamoto when I was publishing on Steemit back in 2017. What I found quite unique was that his approach ultimately protected the coin. In remaining anonymous, the coin would neither be praised nor rejected based upon the actions of the creator. This is a two-edged sword and one that Doge Investors have only seen one side of. While Musk is loved, Doge benefits. What happens if Elon falls out of favor? This is the potential problem that goes hand in hand with an investment that has become centralized around a personality. Doge no longer holds much value outside of Musk, while back in the day it ranked fairly highly solely through an extremely vocal and dedicated community.
Satoshi understood the risks of having a project centralized around a single identity or group of identities. A wrong move could place the project in harm’s way. Elon is rather vocal and outspoken. There is a constant threat that he may one day go too far and say too much. Look at Trump, one day he’s an American icon, and the next he’s being censored to the point of exclusion. Doge holders need to factor these risks into their investment thesis. An investor who never factors in potential risks is not an investor, just optimistic.
I still Hold A Little Doge
I am not saying avoid Doge but rather that investors should consider the positive as well as the negative. Heck, I also hold a little Doge. I don’t really do memecoins but Doge has a lot of sentimental value for me, as it was foundational in my Crypto journey. This is my 8th year in Crypto and so much has transpired since those earlier days. There is a strong possibility that Elon can engineer a shift into greatness for Dogecoin. However, one has to also consider the risks associated with a project so reliant upon one individual. Just some food for thought!