What do you want to do with Mr. Musk who made Dogecoin rise again?[Column]| coindesk JAPAN | Coindesk Japan

Is this what it means to spread to the general public? Elon Musk has replaced Twitter’s familiar blue bird logo with Dogecoin’s Shiba Inu.

Expectations for popularization

Dogecoin has risen about 40% and held steady. There seems to be growing hope that it will cross the 10-cent mark.

That said, the excitement is about ten times less than when the investors who once boosted GameStop stock tried to push Dogecoin to $1 (it never crossed $1, by the way).

It seems that Dogecoin is soaring, Elon Musk will soon introduce a payment system using Dogecoin to Twitter, which he acquired for $ 43 billion (about 5.6 trillion yen, converted to 131 yen to the dollar). It seems that people are thinking about it.

Twitter has millions of active users every day. There are also many celebrities. It’s not entirely unreasonable to expect Dogecoin to rise if even a fraction of them begin accepting payments in Dogecoin.

But Twitter already has payment/tipping capabilities using US dollars and the Bitcoin Lightning Network. Given that the Lightning Network is largely unused, one can roughly predict how much more popular and unreliable Dogecoin will be.

What drives prices?

Of course, this is just my attempt to find meaning in cryptocurrency price movements. Price is basically the only thing that matters in crypto assets, but investors rarely rely on price when considering asset return expectations.

Rather, cryptocurrency prices are a near-perfect reflection of market sentiment, or simply put, the mood of society.

Will the global economy stop due to the new coronavirus? The atmosphere is bad. Locked-in people who got unexpected cash in benefits turned into sassy day traders? It’s a fun atmosphere.

Experimental Stablecoin Crash? bad vibes. Did the Bankruptcy of the United States Reveal the Goodness of Bitcoin? It’s probably a good vibe.

Musk’s influence

Musk has moved Dogecoin prices in the past. In 2020, the price soared after Mr. Musk tweeted an image reminiscent of Dogecoin. Afterwards, he seemed to have a taste for showing off his power through silly posts, and he did the same thing over and over again.

Intervening in disputes between traders and cryptocurrency exchange Binance, dealing with payments in Dogecoin at Tesla, the electric car maker he leads, and planning to transport Dogecoin to space in conjunction with the launch of SpaceX’s satellite. There is also

In more than 30 tweets through the end of 2022, Musk will drive Dogecoin prices up an average of 4.5%, according to crypto-skeptic news site Protos.

There is speculation that Musk has a large amount of Dogecoin. But in fact, he doesn’t know how much, if any, he has.

Investors in New York cheated on Musk by charging Dogecoin with a 36,000% jump in price (as evidenced by Musk’s tweets and his appearance on hit comedy show Saturday Night Live) and then shorting it when it fell. suing for profit. On March 31, Mr. Musk’s lawyers demanded that the case be dismissed, saying Mr. Musk’s remarks were too vague to qualify as misconduct.

Creative Destruction or Just Destruction?

Dogecoin started as a joke, with one of its creators criticizing the status quo. Development on the project stalled for years, but many said the outdated code puts users at risk. Riding the wave of rising prices, and with Musk’s support, the developers announced that they would not only fix Dogecoin, but revamp it. Like the Ethereum blockchain, it will move to Proof of Stake (PoS) and become a true payment system.

Dogecoin developers have suggested that Musk attended development meetings as Top Doge, and Musk said the Dogecoin network has unique capabilities for micropayments.

It remains to be seen if a well-functioning program and support from some of the most influential people in the world alone will make Dogecoin ubiquitous.

Since the FTX bankruptcy, sentiment towards crypto assets has dropped significantly. Most of the politically active and well-educated “chattering class” are fed up with Mr. Musk’s excessive media exposure. Especially now, Twitter’s internal turmoil is in the news almost every week, and I’m a little fed up.

Musk’s seemingly haphazard behavior as Twitter leader has also weakened his support among Tesla shareholders and SpaceX fans. The “creative disruption” that Mr. Musk claims to be the banner may actually be just destruction.

｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Image: ThomasAFink/Shutterstock.com
｜Original: Is Chief Twit Elon Musk Also Top DOGE?