Elon Musk is a tech billionaire, inventor, and the richest African American in the world. Moreover, he was the inspiration for Robert Downy Jr.’s Tony Stark. Now, the CEO of Tesla is also the Twitter “Stonks” guy who is pushing Dogecoin “to the moon” as the currency of tomorrow.
Dogecoin is a type of cryptocurrency, or “crypto.” These cryptos are digital currencies that can be used to buy some goods and services. The most interesting thing about these cryptos is the lack of government regulation. The main interests surrounding these currencies is trading the volatility for profit (or loss) and the anonymity these currencies can grant.
Crypto got very popular in September 2017 with Bitcoin’s rapid increase in value. Ultimately, Bitcoin ended up being worth over $38,000 today. Now, will Dogecoin do the same?
After hype from Elon Musk’s tweets, Dogecoin jumped from $.02 to $.09 over the past two weeks. However, there are two key differences between Dogecoin and Bitcoin. First, Dogecoin was created as a joke to mock the large number of cryptos that kept popping up.
Second, Dogecoin doesn’t have a limited supply like Bitcoin. Infinite supply leads to the inability to sustain any price level. Without scarcity maintaining the value will be impossible.
The price may rise in the short term from hype, but buyers should beware of the potential crash. Doge’s rocket to the moon may crash like SpaceX’s did last week.