2022 continues to be a year of surprises, with one of the biggest to date being Elon Musk’s decision to Acquire social media juggernaut Twitter for the modest sum of 44 billion dollars. While the takeover sparked a whole host of debates — especially those relating to Big Tech censorship — it also called into question the future of Dogecoin (DOGE), a digital currency that the billionaire has been a big supporter of for the past two years.
To put things into perspective, a few hours before Musk tweeted that “the bird is released” on October 27, the price of DOGE was hovering around $0.07. However, on November 1, he had leaps at $0.16, bringing the total market capitalization of the so-called memecoin to $21 billion. And while DOGE is currently trading near $0.08, its 30-day profit rate is over 40%.
It’s also worth noting that each time Musk has tweeted in favor of the digital asset, its value has skyrocketed quite dramatically. For example, throughout 2021, he continued to refer to DOGE as “the people’s crypto”, a message that sent the value of the currency fly by a whopping 4,000% during the year.
Additionally, Tesla – an American multinational auto and clean energy company led by Musk – has launched accept DOGE as payment for its merchandise in January 2022, including its “Giga Texas” belt buckles and miniature vehicle replicas. Additionally, Musk’s recently released joke scent, Burnt Hair, could also be purchased with DOGE.
A dark future for DOGE?
To get a better idea of whether Musk’s takeover of Twitter and continued support from DOGE is likely to leave an indelible mark on the financial future of digital currency, Cointelegraph reached out to Lior Yaffe, co-founder of the Swiss blockchain software company Jelurida. Yaffe doesn’t have too much faith in Dogecoin, judging by the poor decision making displayed by Musk so far, adding:
“Whether it’s paying too much for Twitter or wreaking havoc on the entire company by laying off many good employees and making terrible management decisions like the blue check episode, I’m not optimistic neither for Twitter nor for Dogecoin.”
Furthermore, he claimed that he would be surprised if Musk could bring real-world use cases to Dogecoin, noting that while Musk intended to somehow integrate Twitter with crypto payments – which is a very difficult task – he doubts they will be able to achieve such a goal. dream in the near future. “Even if they manage to build a payment system around Twitter, there are much better blockchain solutions than Dogecoin to choose from when it comes to security, privacy, smart contracts and scaling,” said he declared.
Henry Liu, CEO of cryptocurrency exchange BTSE, told Cointelegraph that after considering the current macroeconomic environment, he expects the price of DOGE to continue to remain highly volatile, in line with the market. cryptography.
“We expect DOGE to remain speculative in the near term, and there should be reduced liquidity and trading volumes across various platforms. If DOGE can be given a new utility regarding its collaboration with Twitter, we can expect a spike fueled by social media communities,” he said.
Not everyone is so skeptical
Nikita Zuborev, chief analyst at cryptocurrency exchange BestChange, told Cointelegraph that while one cannot ignore the fact that meme token growth often happens in sudden and unreasonable ways, the recent acquisition of Twitter by Musk could potentially increase the price of DOGE, mainly because the possibility of the asset being integrated into the company’s social network ecosystem cannot be ruled out in the future. He added:
“If this happens, then the previously useless memecoin will become the central control token of the platform in a way, reaching a massive audience in the process. Such a transformation can bring the coin several use cases, this on what many investors are betting on.
To further bolster his argument, Zuborev pointed to the upcoming launch of the SpaceX-backed Doge-1 lunar satellite, which is directly tied to the coin’s brand. “These types of moves are likely to cause strong demand in the DOGE market and price growth,” he said.
That being said, he conceded that as long as the asset’s main selling point remains rooted in its meme-centric outlook, it would only be wise to add the currency to his portfolio to diversify it. However, as a standalone investment, it doesn’t give DOGE much credit.
“Besides Dogecoin, Musk also spoke quite positively several times about Bitcoin, a crypto that is much more stable and can be easily integrated into the Twitter ecosystem. It can be considered as an alternative to DOGE, especially to capitalize about Musk’s continued market manipulation,” he said.
The usefulness of DOGE is still minimal, and that’s a fact
Thanks to Musk’s affinity for Dogecoin and his recent takeover of Twitter, it stands to reason that speculation regarding the asset’s price is going to run wild, at least for a while yet. That being said, the fact remains that Dogecoin as a crypto project is still quite limited in its operational usefulness, a sentiment shared by Daniel Elsawey, co-founder and CEO of decentralized exchange TideFi.
Taking a more holistic view of the matter, he told Cointelegraph that cryptocurrencies in the digital asset space today fall into two distinct categories: those with smart contract capabilities and those without. have not. In his view, the market as a whole is moving towards tokenizing elements of our daily lives, and this is what should tip the digital asset adoption curve one way or the other. He added:
“Since DOGE cannot interact directly with smart contracts as part of its original design, I would say that unless it is specifically used as a payment option, the associated use cases will continue to remain speculative.”
Finally, since the crypto industry is still in its infancy, it continues to remain heavily dependent on Bitcoin (BTC), retracing its price movements quite strongly. Additionally, volatility continues to permeate the market due to the recent fall in crypto exchange FTX, which will have a direct effect on the price of most cryptocurrencies in the short to medium term. “Dogecoin is no different in this regard. There is still a lot of uncertainty around the asset,” Elsawey concluded.
As we head into a future marked by a high degree of economic turbulence – across a myriad of financial sectors – it will be interesting to see how the future of Dogecoin plays out going forward, especially as projects with limited use cases continue to be wiped out. market seemingly with each passing day.