Elon Musk & Dogecoin — DOGE Is Elon’s Favorite Crypto

Elon Musk’s Dogecoin support has baffled many in the mainstream media. Why would such a prominent figure publicly talk about a relatively niche cryptocurrency? 

Whether you love him or hate him, it’s hard to deny that billionaire entrepreneur Elon Musk is a highly influential figure. With an estimated net worth of $191 billion and the coveted status of being the world’s richest person, Musk has the power of influencing opinions and markets with as little as a tweet (coincidentally, Musk is now the owner of Twitter after acquiring it for a whopping $44 billion). 

Elon Musk’s influence also extended to the cryptocurrency markets after he began mentioning his affection for Dogecoin, a popular cryptocurrency that the crypto community mostly perceives as a joke. Elon Musk first mentioned Dogecoin in 2019, but really began talking about DOGE extensively in 2021, when the cryptocurrency went on a massive price rally.

Dogecoin might be my fav cryptocurrency. It’s pretty cool.

— Elon Musk (@elonmusk) April 2, 2019

What is Dogecoin?

Before we take a closer look at what Elon Musk and Dogecoin have to do each other, let’s first quickly run through through the history of Dogecoin. 

Dogecoin is a cryptocurrency with the ticker DOGE, which was launched in December 2013 by Billy Markus and Jackson Palmer. Even though the Dogecoin market capitalization is now worth billions of dollars, Dogecoin was initially intended as a joke that was poking fun at the rampant speculation in the cryptocurrency markets. The name Dogecoin is derived from the popular “doge” meme, and Dogecoin’s branding heavily features the iconic image of a Shiba Inu breed dog.

From a technical perspective, Dogecoin is a fork of the Luckycoin cryptocurrency. Luckycoin is a fork of Litecoin, which is itself a fork of Bitcoin. Dogecoin is secured through a Proof-of-Work consensus mechanism, and is merge mined with Litecoin. 

Unlike Bitcoin and Litecoin, which both have a cap on the maximum number of coins that can exist, the DOGE maximum supply is theoretically unlimited. 5 billion new DOGE coins enter circulation every year.

In terms of features and technology, there is nothing especially innovative or remarkable about Dogecoin. DOGE’s appeal mostly stems from its humorous branding, and Dogecoin quickly attracted a dedicated community of fans on platforms like Reddit shortly after its launch. The Dogecoin community was known for using the meme appeal of DOGE to fund both charitable initiatives and promotions (for example, by sponsoring a NASCAR driver).

Let’s take a look at some example of Musk’s tweets triggering Dogecoin price spikes, as well as examples of Musk-related news driving rallies in the DOGE market.

Elon Musk’s influence on the DOGE market

On December 20, 2020, Elon Musk tweeted “One word: Doge”. This was immediately picked up by crypto market speculators, who sent the Dogecoin price from $0.039 to $0.046, an increase of about 18%.

On February 4, 2021 Elon Musk simply tweeted “Doge”. Shortly after, he said that “Dogecoin is the people’s crypto”. Within less than two hours of the initial tweet, the DOGE price increased from $0.0408 to $0.057, an increase of about 40%.

On April 28, 2021, Elon Musk tweeted “The Dogefather SNL May 8”, hinting towards his upcoming appearance on Saturday Night Live. The tweet resulted in the DOGE price increasing from $0.260 to $0.342, which is an increase of about 31%.

Beyond the multiple instances of Elon Musk’s tweets being almost immediately reflected in the DOGE price action, the price movements of Dogecoin are sometimes also driven by news related to Elon Musk. For example, Dogecoin rallied in October 2022 when Musk finalized his acquisition of Twitter (the acquisition was concluded on October 27). The price of DOGE more than doubled between October 25 and November 1, 2022.

With all of this in mind, it’s clear that whenever you’re making your Dogecoin price prediction, Elon Musk’s support for the project is an extremely important factor to consider.

Dogecoin’s massive 2021 bull run

2021 was an extremely bullish period for the cryptocurrency market, with many major cryptocurrencies hitting their all-time high prices. Investors seemed to be willing to park their money into just about any cryptocurrency, and there was a general sense of exuberance and FOMO (fear of missing out) in the market.

Following Elon Musk’s public “endorsements” of Dogecoin, social media users on platforms like Twitter and TikTok began encouraging each other to buy Dogecoin with the goal of sending the price of Dogecoin to $1. 

All of this created a perfect storm that allowed Dogecoin to go on one of the most impressive rallies the cryptocurrency sector has ever produced. The Dogecoin price was about $0.005 on January 1, 2021. On May 8, 2021, the DOGE price hit its all-time high of $0.738, an unbelievable 147.6x price increase from the start of the year. 

DOGE’s all-time high came coincided with Elon Musk’s appearance on Saturday Night Live, which also happened on May 8, 2021. While Musk did mention Dogecoin during his SNL appearance, the rally in anticipation of his appearance was a classic example of “buy the rumor, sell the news”—the DOGE price saw a steep correction in the following week.

Elon Musk and DOGE development

Elon Musk has been involved with Dogecoin beyond just mentioning the cryptocurrency in his tweets. According to Musk, he has been in touch with Dogecoin developers, discussing ways of how Dogecoin could be improved to be a more efficient tool for payments. 

In May 2021, reports came out revealing that Elon Musk first got in touch with Dogecoin developers in 2019. Musk himself has also stated that he was working with Dogecoin developers to “improve system transaction efficiency”.

Working with Doge devs to improve system transaction efficiency. Potentially promising.

— Elon Musk (@elonmusk) May 13, 2021

Elon Musk has also had interactions with Dogecoin’s founders Jackson Palmer and Billy Markus. Palmer has become a vocal critic of cryptocurrency and has expressed annoyance about his name being permanently associated with Dogecoin, while Markus seems to be more positive on the subject. Palmer has openly expressed his dislike for Musk, and the two had a spat on Twitter after Palmer called Elon Musk a “grifter” in an interview. On the other hand, Markus and Musk appear to be on good terms.

How much Dogecoin does Elon Musk have?

It’s currently unclear how much Dogecoin Elon Musk owns. Some users have claimed that the largest Dogecoin wallet, which at some point held close to 30% of the total DOGE supply, belongs to Musk. However, there is no strong evidence to support this claim.

Does Elon Musk still hold Dogecoin?

Yes, Elon Musk most likely still holds Dogecoin. In March 2022, Elon Musk said “I still own & won’t sell my Bitcoin, Ethereum or Doge”. In June 2022, Elon Musk stated: “I will keep supporting Dogecoin”. So, while we can’t say with absolute certainty that Musk still owns DOGE, it’s very likely that he does.

What is Elon Musk’s involvement with Dogecoin?

Elon Musk has frequently expressed his support for Dogecoin, which has in some cases also had a noticeable impact on the DOGE market. In addition, Elon Musk has been in touch with Dogecoin’s development team, discussing ideas to improve the energy consumption and efficiency of the Dogecoin cryptocurrency.

Which cryptocurrencies does Elon Musk hold?

Elon Musk says he holds Dogecoin, Bitcoin and Ethereum. As of March 2022, Musk said that he still held all these three cryptocurrencies. Musk hasn’t mentioned owning any other cryptocurrencies.