According to an exclusive interview with this news outlet, the Dogecoin development team confirmed that billionaire Elon Musk offered to fund the cryptocurrency project in 2019. However, Elon Musk’s proposal was declined. Instead, the “father” of Dogecoin requested Elon Musk to provide advice as they planned to improve the coin to make it a more environmentally friendly alternative to Bitcoin.
“Working with Doge developers to improve transaction efficiency of the system. Promises potential”, Musk tweeted. Dogecoin subsequently rose from about $0.43 to $0.52 on the Binance cryptocurrency exchange right after the tweet.
According to CoinMarketCap.com, from being a ‘worthless’ coin at the end of 2020, Dogecoin has become the fourth-largest cryptocurrency by market capitalization, increasing more than a hundred times this year as speculators flocked to this asset. The price of Dogecoin skyrocketed under Musk’s “patronage,” rising from $0.008 in January 2021 to an all-time high of $0.71.
SpaceX previously also stated that they would launch the “DOGE-1 Mission to the Moon” in the first quarter of 2022 and would accept payments in Dogecoin cryptocurrency.
Due to the intense price volatility of Dogecoin, many people have become millionaires, primarily young individual investors with a taste for high-risk investments, willing to put money into high-risk coins. Glauber Contessoto, a 33-year-old investor in Los Angeles, is one such case. This investor became a millionaire after spending $180,000, which was borrowed money, to buy Dogecoin, reaping over $1 million. Most recently, Aziz McMahon – CEO of Goldman Sachs’ London branch – resigned after making millions in profits from Dogecoin.
However, some experts have continuously warned about the overheated growth of Dogecoin.
“The rise of Dogecoin is a classic example of the Greater Fool Theory. When everyone is [buying Dogecoin], the bubble will eventually burst, and you will incur significant losses if you don’t exit in time. And it is nearly impossible to predict exactly when that will happen”, David Kimberley, an analyst at the investment app Freetrade, told CNBC.
“You can make quick profits if you time it right, but getting the market timing wrong is truly terrible”, Adam Zadikoff, CEO of BRD – a cryptocurrency wallet with over 7 million users – commented.
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