Dogecoin – 3 Types of Cryptocurrency That Elon Musk Tweets About
Undoubtedly, one of the main ingredients of Tesla’s (NASDAQ:(TSLA)) success has been the trillions of dollars of free publicity that the statements and antics of its CEO, Elon Musk, have obtained for the company. Outgoing and outspoken, possessing a great sense of how to drive headlines, and looking the part of a wildly successful tech entrepreneur, Musk has become a favorite subject of the American and international media. I believe that Musk’s tweets about cryptocurrency, Tesla’s purchases of cryptocurrencies, and the automaker’s decision to accept them as payment for its vehicles are simply new methods that Musk is using to garner very valuable headlines for Tesla and himself.
After all, the media in general and the financial media in particular have become infatuated with the world of cryptocurrency. And with the recent, tremendous increase in the popularity of stock purchases, the financial media has become more powerful than ever before.
Additionally, as I wrote in a previous column on Dogecoin, I think the main force propelling cryptos higher is their “coolness” factor. Specifically, many consumers and some companies are buying cryptos like Bitcoin (CCC:BTC-USD) and Dogecoin (CCC:DOGE-USD) primarily because they are viewed by many millennials as “cool.” I believe that Elon Musk is tweeting about and buying cryptos largely to enhance the “coolness” factor of his company and himself.
Nevertheless, here’s a list of three cryptos that Musk has tweeted about, along with some of his statements about each cryptocurrency, and my own views on them.
Most recently, on April 10, in a statement that many thought was referencing Bitcoin, Musk tweeted, “going to moon very soon.” Apparently, many Bitcoin fans like to say that the cryptocurrency will go “to the moon.” On the other hand, as Fintech Zoom pointed out, Musk may well have been referring to another one of his companies, SpaceX, which plans to visit the moon in 2023.
Nonetheless, Fintech Zoom reported that the tweet had resulted in “speculation about (Musk’s) plans” regarding the cryptocurrency, and the publication suggested that the CEO’s tweet had sparked the rally.
On Jan. 29, Musk altered his Twitter bio to #bitcoin. In December 2020, he tweeted “Bitcoin is my safe word,” along with, “Bitcoin is almost as bs as fiat money.” On March 26, he tweeted that his automaker would start selling its vehicles in exchange for Bitcoin.
On Feb. 20, the CEO tweeted, “An email saying you have gold is not the same as having gold. You might as well have crypto. Money is just data that allows us to avoid the inconvenience of barter. That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.” In a separate tweet, he added, “That said, BTC & ETH do seem high lol.”
On close inspection, his tweets that seem negative towards Bitcoin are somewhat positive towards it. In other words, he suggests that Bitcoin is less “bs” than fiat currency and indicates that he expects the efficacy of cryptos to improve. Although Musk stated that Bitcoin and Ethereum “do seem high,” he notably once made a similar statement about Tesla stock, so in a way, Musk tweeting that the cryptos “seem high” could be viewed as positive towards them.
As I noted in my column on Dogecoin, I believe that the “the opposition of governments and large banks to cryptocurrencies is likely to prevent them from ever going mainstream.” Given the widespread publicity that Bitcoin has obtained, I think that it can continue to have a growing but fairly small user base for another year or two, with large price fluctuations, until the cyptocurrency bubble bursts in another year or two. After that, I think Bitcoin’s value will crash and most consumers and companies will abandon it.
On April 1 (ironically or perhaps not), Musk tweeted that “SpaceX is going to put a literal dogecoin on the literal moon.” Back on April 2, 2019, the day after April Fool’s Day, Musk tweeted “Dogecoin might be my fav cryptocurrency. It’s pretty cool.” In February of this year, asked why he’s so upbeat on the cryptocurrency, Musk tweeted that he “loves dogs and memes.”
He’s also written that Dogecoin is “the people’s crypto” and proclaimed that it is “on the verge of getting broad acceptance.” However, he’s also suggested that all of “his tweets about dogecoin were meant as jokes,” in CNBC’s words.
I don’t think Musk’s main goal in writing the tweets was to be funny; instead, I believe that he’s using them to garner widespread, free publicity, a goal that they’ve accomplished to a large extent.
As I wrote in my previous article, I believe that Dogecoin is “a rare bubble within a bubble,” while other InvestorPlace contributors have contended that the currency is unstable and has little reason for existence. Given these points, I expect interest in the cryptocurrency to drop sharply by the end of this year, causing its value to plunge. By the middle of 2022, I think it will be largely ignored and worthless.
It seems that Musk has not tweeted a great deal about this cryptocurrency. As noted earlier, on Feb. 20, he wrote that Ethereum did “seem high.” Last July, he tweeted, “I’m not building anything on ethereum. Not for or against it, just don’t use it or own any.”
Two years ago, speaking on a podcast, Musk was more upbeat on Ethereum, saying “the Bitcoin structure is quite brilliant” and suggesting that there could be “some merit to Ethereum as well and maybe some others.”
I’m much more bullish on the longer-term outlook of Ethereum than on any cryptocurrency. That’s because it’s actually “an open-source, blockchain-based, decentralized software platform,” rather than a cryptocurrency per se, as Investopedia points out. I believe that such a platform could be quite useful for functions like stock trading, selling tickets to events, and vote counting. That’s because it would, I believe, enable everyone to easily see and trace transactions in real time, creating the ultimate transparency.
I’m sure Ethereum would have multiple other very important uses as well. And I do not believe that banks and governments would be as opposed to it as they are to Bitcoin and Dogecoin, which infringe on the powers of both entities. Therefore, I think that Ethereum could widely proliferate in the future.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.