Dogecoin (CRYPTO:DOGE) is no longer a sleeping dog. The most popular in the world coin is now up 188% in the last 30 days, and a staggering 340% year to date. Following Donald Trump’s victory as President of the United States, Dogecoin has been one of the most successful players in the crypto market.
What is going on here? Is this yet another example of a meme coin exploding in value due to hype and buzz, or is there really something behind Dogecoin’s recent resurgence? Let’s take a closer look.
Elon Musk’s story
Dogecoin’s return to prominence has been fueled by the pro-crypto optimism surrounding the Trump administration. During the election campaign, Trump made several pro-crypto promises. While none of these relate specifically to Dogecoin, they highlight a new business-friendly regulatory regime for crypto, as well as the growing acceptance of crypto in the investment world. Of course, all of this would be positive for Dogecoin.
But what really seems to be driving Dogecoin’s breakthrough is the unofficial support of billionaire Elon Musk, who was tasked by Trump with creating a new Department of Government Efficiency, or DOGE for short. As a result, “DOGE” made headlines in traditional financial newspapers and on social media. Since DOGE is the ticker symbol for Dogecoin, it’s easy to see why crypto traders have been rushing to buy this meme coin.
Although Musk never officially stated that Dogecoin would be part of DOGE’s future, it is expected that one way or another, the tech billionaire will find a way to integrate the crypto in its strategy. Maybe Musk will one day allow you to pay your taxes in Dogecoin instead of dollars?
It’s the same kind of anticipation that fueled a mini-rally in Dogecoin when Musk acquired Twitter (now known as X) in April 2022. Crypto bulls thought Dogecoin integration for Twitter would happen soon, given Musk’s previous support for Dogecoin. More than two years later, this has still not come to fruition.
Coinbase joins the DOGE debate
If this were just Musk banging the drum for DOGE, it might be easy to ignore the latest Dogecoin hype. After all, we’ve seen this same story with Twitter before. But now a number of high-profile business leaders are starting to talk about DOGE. One of them is Brian Armstrong, CEO of Coinbase Global.
According to Armstrong, DOGE – the government entity, not the coin – is all about economic freedom, reducing the size of government, and eradicating government waste. He even suggested that DOGE could lead to the elimination of the personal income tax or a new constitutional amendment to limit government spending. So we’re not just talking about a few small things to save the government money, we’re talking about huge, fundamental ideas that could influence the future of America.
Why do people invest in meme coins?
This is why I think Dogecoin’s recent rally is more than just a fad: it indicates that something important is happening within American society. And that’s not necessarily a good thing.
People invest in meme coins when they don’t have confidence in traditional assets. People buy into the idea that meme coins will make them rich overnight because they have lost faith in the American dream. And they buy meme coins instead of fiat currencies (like the US dollar) because they have lost confidence in “the full faith and credit of the federal government.”
This may sound like I’m making a case for investing in Dogecoin or other meme coins. I’m not. What I’m saying is that Dogecoin’s post-election rally is more than just a fun new way to play the “Trump trade” in the crypto market. It’s a symptom of a much bigger problem.
Coin mania
In 2025, expect the meme coin mania to continue. Cryptocurrency investors will likely exit a core group of meme coins – such as Dogecoin, Shiba Inu, Pepe, Bonk and Floki – depending on which has the greatest momentum. Right now, Dogecoin has all the momentum, but signs suggest Floki could be next, given its new Coinbase listing.
Just a month before the election, tech billionaire Mark Cuban called investing in meme coins essentially playing a game of musical chairs. This game is fun to play, as long as you don’t get stuck with the wrong coin when the music stops. If you are still considering investing in Dogecoin, you should keep this in mind.
Dominique Basulto has no position in any of the stocks mentioned. The Motley Fool ranks and recommends Coinbase Global. The Mad Motley has a disclosure policy.
The Motley Fool is a content partner of USA TODAY providing financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
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