Elon, DOGE, and Twitter
Elon, DOGE, and Twitter
A Bitcoin Wars Theory
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As I've shared the thoughts as I'm about to present them, a few others in my various Bitcoin discussion groups agreed and seemed to share versions of this theory independently.
Understand that as I haven't been trading much cryptocurrency since the pandemic started, my level of detail is not currently at the professional level. The insider tracks that I would go deep with as a trader are disused. That said, I followed and traded dogecoin quite successfully, so I'm qualified enough to rush out an article in three hours to share a theory.
A Very Brief Dogecoin Primer
For those new to cryptocurrency, know that DOGE (dogecoin) is one of the oldest and most popular cryptocurrencies besides Bitcoin. It started almost nine years ago with two software engineers supposedly creating it as a joke aimed at the wild speculation in cryptocurrencies that started to pop up weekly (they now pop up daily). This altcoin uses a proof-of-work (PoW) timestamping scheme, and is a mined blockchain network, much like Bitcoin. While it has a silly dog (Shaba Inu) mascot, and is known as a (maybe the first) "memecoin", make no mistake—DOGE is one of the more battle tested and reliable cryptocurrencies outside of the three or four most people might hear about most regularly as "serious investments".
As a trader, I can attest to DOGE being used as a quick and easy way for traders to pass money between cryptocurrency exchanges. I have personally traded millions of DOGE at least partially for that reason. While swing trading isn't the form of trading I generally focus on, DOGE always felt safer to play with on that level due to its popularity among the crypto crowd. Also, it gets pumped when Elon Musk wants it pumped…
Elon and DOGE
Elon has an enormous fan base. Personally, I'm not a fan of hero-worship. I think it's terribly dangerous. But that's an article for another day. I just want to establish the fact: Elon moves markets like few people in history. And that can only make a fanbase more rabid. I know quite a few people who have made substantial amounts of money investing in his enterprises.
So, it goes without saying that when Elon adopts the cutest memecoin in the cryptoverse, it's an event.
During my ten minutes of research, I wasn't able to establish exactly when Elon started hawking the memecoin, but it's clear that as of last year, he took a personal interest in the engineering behind the blockchain network on which the memecoin operates.
Now, one must wonder whether Elon had Twitter in mind at the time. It was several years earlier when asked how much Twitter would cost.
The Mysterious DOGE Whale
Last year several rumors circulated that a single wallet address had soaked up 30% of DOGE.
I was too busy getting this substack off the ground to research at the time, but my first thought was, "That's probably Elon." However, I may have been wrong on that account. As some of the redditors guessed, reports came out suggesting the wallet was an exchange account, and likely belonged to the Robinhood exchange. That does make more sense given that the value of the coins in that wallet peaked at more than $20 billion in value. Elon probably would have stopped there and traded some of that in for Twitter stock.
Robinhood opened cryptocurrency trading in February, 2018, and DOGE was added to the exchange in mid-July that year. It is certainly possible that this exchange wallet was not the first used at Robinhood and was established a few months after that. Either way, the DOGE held there is now a fraction as full of doggy memecoin wallet held at its peak.
Still, that doesn't mean that Elon does not own some substantial amount of DOGE. If you were him, wouldn't you own a substantial amount of some new technology that you're tweeting about?