Cryptocurrency Dogecoin (DOGE -2.97%) saw its value drop this week. The meme coin is trading down 15.5% as of 4:40 p.m. ET on January 23, but was down 17.5% earlier in the week. The crisis occurs when S&P500 gained 2% and Nasdaq100 gained 2.1% over the week.
Dogecoin is feeling pressure from high-profile entrants in the coin space this week, weakening its main value proposition in the eyes of some investors.
Trump released his coin days before he was sworn in as president. Appointed Official Trumpit has the $TRUMP ticker. The token is intended as a meme – as Trump’s official website makes very clear – and not as a serious financial instrument. But as we’ve seen with Dogecoin and others, memes can be lucrative under the right circumstances.
The official Trump is up more than 400% since its launch, although it rose nearly 1,000% earlier in the week before losing about half its value.
Move over, Dogecoin!
The release of the Trump official – followed closely by several others, including Official Melania meme – challenged a central narrative of Dogecoin’s value. The dog-themed crypto is closely associated with Elon Musk, and investors might have hoped that this proximity to the new president would boost its notoriety. With Trump and his team posting several other directly competing memes, the investment thesis no longer appears audible.
Beyond that, Trump’s official post has rattled some crypto faithful, who view it as damaging to crypto’s image. Many hope that Trump’s presidency will be a period where crypto continues to consolidate itself into traditional finance, but the release of something like Official Trump could seem to undermine that hope.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.