From Dogecoin to D.O.G.E: Is Elon Musk Participating in a Billionaire's Cryptocurrency Experiment?

Initially launched as a joke about cryptocurrency speculation, Dogecoin has become the speculative asset it was created to mock — largely due to the influence of Elon Musk. His social media activity and public endorsements have played a central and ongoing role in shaping the trajectory of DOGE. BeInCrypto spoke with Erwin Voloder, Head of Policy at the European Blockchain Association, to discuss how Musk blurs the lines between mockery and promotion, causing people to ascribe real value to a meme and raising ethical concerns in the process. The Birth of Dogecoin In late 2013, software engineers Billy Markus and Jackson Palmer collaborated to create Dogecoin, the first meme coin in the history of cryptocurrency. Its main purpose was to serve as a lighthearted parody of the chaotic cryptocurrency craze. Born from the internet meme "Doge," featuring the image of a Shiba Inu dog, this meme coin is considered a humorous mockery of the often illogical nature of cryptocurrency speculation. Although it originated as a joke, Dogecoin quickly attracted a large online following—so much so that even Tesla's CEO Elon Musk was drawn to it. Nowadays, he is considered a key figure in the community, and Dogecoin, contrary to its original philosophy, has become a speculative asset. "Musk's involvement has transformed Dogecoin from a satirical internet token into a speculative asset by granting it legitimacy and perceived entertainment value. His tweets and appearances have turned Dogecoin into more of a cultural product than a financial product—a form of performance art with real economic consequences. Ironically, a coin created to mock irrational investing has become the poster child for irrational investing," Voloder said. In addition to symbolic confirmations, Musk has made a specific impact. A prime example is Tesla's decision in early 2022 to accept Dogecoin for a select number of items, significantly reinforcing the company's position and demonstrating the practical potential of the company. Musk has also not hesitated to use social media to express his love for Dogecoin. How Have Musk's Tweets Affected the Dogecoin Market? Over the years, Elon Musk, an active Twitter user even before purchasing the platform, has shared many posts mentioning Dogecoin. Each of these tweets has had a significant impact on the visibility and price performance of this meme coin. When Musk mentioned Dogecoin in a tweet in April 2019 as his favorite cryptocurrency, the market went crazy. In two days, the price of this coin rose from $0.002 on April 1 to $0.004.

Two years later, Musk's post X stating "Dogecoin is the people's cryptocurrency" caused an overnight trading volume increase of over 50%. Before long, retail investors began to unconsciously follow Musk's endorsements. But not everything went smoothly. Musk's unpredictable statements also came with extreme volatility. "Musk has blurred the lines between parody and promotion, leading people to assign real value to a meme. Without him, it might still be a joke on the internet, but with him, it has become a symbol of absurd speculative behavior," Voloder said. When Musk called Dogecoin 'a scam' on Saturday Night Live in May 2021, the coin lost more than a third of its value in just a few hours. "Dogecoin has no clear roadmap, no fundamental profit or utility, and limited development activity, meaning its valuation mainly depends on sentiment. In such an environment, the actions of an individual can drive or destroy market perception, especially when that individual is one of the wealthiest and most followed people in the world," he added. Then, in January 2025, President Trump appointed Musk as the head of a newly established agency tasked with cutting federal spending. Musk calls it the Government Efficiency Department, or abbreviated as DOGE. This name is intentional, and the internet has collapsed accordingly. DOGE and Price Drops: What is the Relationship? President Trump ordered the establishment of the DOGE department on the very first day of his inauguration. After DOGE launched the official government website, the price of Dogecoin rose by 13% in 15 minutes, breaking the previous short-term downtrend. However, since the Government Efficiency Ministry was officially established, the price of DOGE has dropped significantly. Although it was valued at $0.36 on January 20, its price has fallen to $0.15 today.

Recent findings from Finbold's report also reveal that Musk may currently be having a reverse impact on the value and sentiment of Dogecoin. According to data, the number of Dogecoin millionaire wallet addresses has decreased by more than 41% from January 21 to March 31. In just over two months, this cryptocurrency has lost 964 addresses. Notably, the report points out a significant decline in the number of the richest Dogecoin addresses. The number of addresses holding between 1 million and 9.99 million dollars has decreased by 40.21% in the first quarter of 2025. Moreover, the number of addresses holding over 10 million dollars has decreased sharply by 47%, from 400 to 212. In summary, Dogecoin investors are selling off this coin.

"Musk's influence remains an important variable in the valuation of Dogecoin, and the timing of the drop in high-value addresses closely resembles his announcements about DOGE, indicating a correlation. However, attributing the entire reversal to Musk overlooks broader macro factors such as rising interest rates, tighter regulations on cryptocurrency, and waning retail enthusiasm since 2021," Voloder explained. Despite the difficulties in accurately assessing the impact of Elon Musk's leadership position of DOGE on Dogecoin's performance, his significant influence on this cryptocurrency has become clear. The ethical considerations that accompany Musk's influence have also become hard to ignore. Concerns About the Ethical Implications of a Billionaire's Influence According to Voloder, the case of Dogecoin illustrates the danger of socially-driven investing, a behavior where people mistakenly attribute credibility to celebrities based on their status or appeal. It also demonstrates the dangers of thoughtlessly relying on endorsements, which can lead to significant financial losses for retail investors. The ethics of a billionaire influencing a volatile market like cryptocurrency also have significant complexities. "On one hand, Musk has the right to express personal opinions and engage in public discussions, including those surrounding assets like Dogecoin. On the other hand, his significant influence means that his comments can lead to real financial harm or excitement among retail investors, who often do not have access to complex risk models. Ethically, when you hold that kind of influence, there is a strong argument for taking on a higher standard of responsibility—especially in a market with few barriers," Voloder said. Due to the unregulated nature of the cryptocurrency industry, it is currently very difficult to determine the level of accountability for Musk's actions. Does Musk's Influence Constitute Market Manipulation? Although presented as personal opinions, Musk's tweets clearly influence the price of Dogecoin, creating a legal gray area related to the potential for market manipulation under U.S. securities and commodities law. "According to SEC regulations, market manipulation involves intentional conduct designed to deceive or defraud investors by controlling or artificially influencing market prices. Although Dogecoin is not officially considered a security and thus falls outside the traditional scope of the SEC, the CFTC may still scrutinize it under its anti-manipulation authority over commodities," Voloder explained. The Dogecoin incident is not the first time a high-profile figure has influenced the market in a manipulative way, although it is not entirely illegal. Voloder highlighted two cases at different times in the 20th century: when the famous banking tycoon JP Morgan manipulated the market during the panic of 1907 and investor George Soros bankrupted the Bank of England in 1992. Although their technical moves are legal, they still manage to influence market outcomes. However, this is the 20th century and their impact is much smaller. "The difference today is that social media provides instant access to millions of investors, amplifying potential impact. Therefore, even if Musk's tweets are framed as personal reflections, their predictable impact on prices can be seen as a form of market signaling—intentional or not," Voloder said. In fact, the SEC and legal experts are debating the potential influence of Elon Musk on the financial market activities of Dogecoin. A Lawsuit Worth 258 Billion USD Elon Musk is currently facing a $258 billion class action lawsuit for operating a Dogecoin pyramid scheme. The lawsuit was filed in June 2022, claiming that Musk intentionally promoted Dogecoin through tweets, public appearances, and interactions with the media, creating hype and driving demand. According to the plaintiffs, this artificial inflation of Dogecoin prices has allowed Musk and his companies to profit while causing other investors to suffer significant losses as the price inevitably fell. Due to the SEC's unclear legal classification of cryptocurrencies such as Dogecoin, Voloder predicts a difficult path for these claims in court. However, the lawsuit highlights the growing attention to market manipulation by influential figures. "However, the lawsuit signals increasing legal pressure to determine where the enthusiasm for advertising ends and financial misconduct begins. If regulators or courts decide that Musk intentionally manipulated the market or deceived investors, he could face civil penalties or be forced to settle. The SEC's previous scrutiny of Musk's tweets about Tesla, which led to a consent decree, shows that regulators are willing to act when speech that alters the market crosses certain thresholds," Voloder explained. Musk's influence on Dogecoin has not diminished at all, and the long-term effects on the Dogecoin community remain a controversial topic. Is the Resilience of the Dogecoin Community Sustainable? The rapid 40% decrease in Dogecoin whale addresses over the past two months has raised questions about the strength and future resilience of this meme coin. However, the fundamental strength of DOGE remains intact – that is community. "Although the initial frenzy has subsided, Dogecoin still retains a loyal fan base, many of whom appreciate its meme-driven culture, low transaction fees, and iconic branding. However, the large speculative crowd that initially drove its [all-time high] has largely left the space due to the lack of continuous optimistic narratives or meaningful technological upgrades," Voloder concluded. In the future, traders will watch to see whether the "enthusiastic fan base" of Dogecoin diminishes or whether a strong community will maintain this "OG meme coin."