Is Dogecoin Price Only Dependent on the Elon Musk Narrative?
Dogecoin ($DOGE) has become one of the most popular cryptocurrencies in the world with a market capitalization of over $8 billion. Dogecoin has seen spells of Pumps that have been predominantly dependent on Elon Musk’s Tweets but is that all there is to Dogecoin?
The Elon Musk Effect
Elon Musk is a well-known figure in the cryptocurrency world, and his tweets about Dogecoin have often caused the price of the coin to PUMP. In 2021, Musk tweeted that he was “dogefather,” and the price of Dogecoin surged by over 200%. He has also said that he would like to see Dogecoin become a viable payment option for Tesla products. Not just that, Tesla went one step ahead and is accepting Dogecoin for some products. The LAUNCH OF SPACEX FALCON 9 WITH DOGE-1 & IM-1/NOVA-C is scheduled for September 14, 2023. This is of course paid using Dogecoin.
The Biggest reason why Musk’s support for Dogecoin adds heft is because of what he may do with Twitter. Many have speculated that Twitter will eventually become a universal fintech app and Dogecoin will play a critical role in it. Dogecoin pumped 10% in October 2022, the month Musk took over Twitter. The recent appearance of the Dogecoin Logo on Twitter has reinforced this speculation.
Many of these events reinforce the fact that Musk plays a critical role not just in Dogecoin’s price movements but also in the likely future of Dogecoin. Musk is so embedded in the Dogecoin narrative that some Dogecoin investors went out and filed a lawsuit against Musk
But is Dogecoin only about Musk and nothing else?
Dogecoin Price Performance
Since the day US Consumer Inflation breached 6%, Dogecoin is down 76%, just 10% points better than the other major ‘Meme’ Coin, Shiba Inu. This year, Dogecoin is down 12%, and Shiba Inu is down 16%. So while it is true that Musk Pumps have benefitted Dogecoin in 2021, the scale and size of the benefits are much smaller over the last 20 months and the edge if any (versus say Shiba Inu) is only marginal. In fact, macroeconomic factors and Market acceptance of Dogecoin are increasingly playing a bigger factor.
Market Acceptance will be a major driver
Dogecoin is now accepted by a growing number of businesses and merchants. For example, it can be used to purchase goods and services on Amazon, Starbucks, and Whole Foods. It can also be used to pay for gambling, gaming, and travel.
It is currently accepted by over 2,000 places, stores, and services. The number of merchants accepting Dogecoin is distributed across various categories, with ‘Shops, markets’ leading with 1,234 merchants, followed by ‘Internet services’ with 754 merchants, and ‘Crypto services’ with 565 merchants. Dogecoin has also seen adoption in the realm of cryptocurrency payment processors. It currently ranks as the fourth most popular cryptocurrency on BitPay, a leading platform in this domain. Dogecoin transactions constitute 6.17% of all transactions processed through BitPay.
It is these variables including whether Twitter will accept Dogecoin as a payment mode that will be a bigger factor going ahead than funny Musk Tweets. Musk’s Tweets announcing these partnerships on the other will rightly have a huge positive impact on Dogecoin’s Price.