Introduction and Origins of Dogecoin

What is Dogecoin ($DOGE)?

Dogecoin (DOGE) was created in 2013 when Bitcoin’s price was skyrocketing, sparking a wave of enthusiasm in the cryptocurrency market. IBM engineer Billy Markus and Adobe engineer Jackson Palmer developed Dogecoin as a satire on the proliferation and hype surrounding Bitcoin. They combined the viral “Doge” meme with Bitcoin to create Dogecoin and launched the official website Dogecoin.com, a playful nod to Bitcoin’s official site, Bitcoin.com.

Markus even changed his Twitter handle to “Shibetoshi Nakamoto,” poking fun at Bitcoin’s mysterious creator, Satoshi Nakamoto. They humorously referred to mining as “digging” and adopted an unlimited supply model for Dogecoin, departing from Bitcoin’s fixed supply. Initially, Dogecoin’s total supply was capped at 100 billion, but in February 2014, the development team removed the cap, allowing an annual increase of 5 billion coins. Following its launch, Dogecoin quickly gained popularity on social media due to its humorous style and became a unique presence in the cryptocurrency market. It is often considered the original “meme coin.”

The DOGE meme featuring Kabosu, the Shiba Inu (Source: wikipedia)

DOGE’s Foundation

• Blockchain Technology: Dogecoin has its own blockchain, called the Dogecoin Chain, which utilizes the same Proof of Work (PoW) mechanism as Bitcoin.
• Issuance Mechanism: Dogecoin initially had a supply cap of 100 billion coins, with an annual increase of 5 billion coins, making it inflationary.
• Block Time: Transactions are confirmed quickly, usually within about one minute, and Dogecoin has low transaction fees, making it suitable for micro-payments.
• Tipping Culture: Dogecoin first gained popularity on social platforms like Reddit and Twitter, where it was used to tip creators and support small projects. Users could use Dogecoin to express gratitude for high-quality content, fostering community interaction and cohesion.
• Meme Culture: The Shiba Inu “Doge” image strengthened brand recognition, attracting a younger audience.

Historical price trends of $DOGE (Source: tradingview)

Musk’s Love-Hate Relationship with Dogecoin

Performance in the Last Bull Market (2019-2022)

Dogecoin initially gained popularity as a tipping system on Reddit’s American community platform. When users shared great articles, others could send Dogecoin to the author through a tipping bot as a token of appreciation. At the time, the coin’s performance was poor, and few viewed it as an investment tool.

However, Dogecoin’s exposure significantly increased starting in 2019, thanks to public support from Tesla founder Elon Musk. He began tweeting in support of Dogecoin and publicly stated on X that “Dogecoin is his favorite cryptocurrency.” Musk, CEO of Tesla, has always been a fan of DOGE. Although his initial tweet had little impact on DOGE’s price, Musk continued to post about the token. Dogecoin skyrocketed in 2021, reaching an all-time high of around $0.74. This surge brought increased attention and a rise in price for Dogecoin.

Elon Musk’s tweet from April 2, 2019 (Source: x)

Elon Musk’s tweet from July 18, 2020 (Source: x)

Elon Musk’s tweet from February 4, 2021 (Source: x)

Elon Musk’s tweet from February 4, 2021 (Source: x)

In May 2021, Musk jokingly referred to Dogecoin as a “hustle”

Since Elon Musk became the promoter of Dogecoin, the coin’s performance has steadily grown. However, in May 2021, during an appearance on Saturday Night Live, he referred to Dogecoin as “a hustle,” causing its price to drop by about 40%.

2022 Musk vs Dogecoin vs Tesla

On February 19, 2022, Musk tweeted that the “Tesla Supercharger Station” built in Los Angeles in 2021 would accept Dogecoin as payment. The station would feature an old-fashioned theater, a skating rink, and a restaurant. He also revealed in an X Space that he still held a large amount of Dogecoin and had not sold any of his coins. (The actual situation is unknown, as Tesla’s Supercharger stations are still under construction, and whether Musk will fulfill his promise to accept Dogecoin as payment remains to be seen.)

Products available for purchase with Dogecoin on Tesla’s official website in 2022 (Source: x)

On January 14, 2022, Musk tweeted, “You can buy Tesla merchandise with Dogecoin.” According to Tesla’s official website, except the electric ATV (Cyberquad), most items available for purchase were clothing and accessories, such as the “Giga Texas Belt Buckle” commemorating the completion of the Texas Gigafactory and the “Cyberwhistle” shaped like the Cybertruck. Tesla electric vehicles (such as the Model S and Model Y) were not available for purchase with Dogecoin.

Due to Dogecoin’s high volatility, if a purchase was made at a price peak, buyers could end up paying more than others. Tesla’s website also noted that the price of Dogecoin would be updated at different times during the day but not in real time, so users would need to check the current price before making a purchase. Additionally, products purchased with Dogecoin were not eligible for returns or exchanges. After Musk’s tweet, the price of Dogecoin surged by over 15%, breaking the $0.20 mark.

Products available for purchase with Dogecoin on Tesla’s official website in 2022 (Source: abmedia)

Elon Musk’s tweet from May 27, 2022 (Source: x)

Elon Musk’s tweet from May 27, 2022 (Source: x)

Bear Market Period

During the last bear market, Dogecoin’s performance declined alongside other mainstream cryptocurrencies, dropping to around $0.1. However, Musk continued to express his love for Dogecoin, frequently tweeting to highlight his support for the coin during this period.

Elon Musk’s tweet from February 15, 2023 (Source: x)

Performance in 2024 and the U.S. Presidential Election

The passing of Dogecoin’s mascot, Kabosu

Earlier this year, Dogecoin’s mascot, Kabosu (かぼす), passed away on May 24, 2024, at the age of 18. Musk also posted a tribute in remembrance. Just minutes after Musk’s tweet, the price of $DOGE briefly surged nearly 5%, reaching a high of $0.173, but it soon started to decline.

Elon Musk’s tweet from May 24, 2024 (Source: x)

Musk strongly supports the 2024 U.S. presidential candidate, Donald Trump.

The 2024 U.S. presidential election became the main driver behind the surge in Dogecoin’s price, as Musk expressed strong support for Donald Trump returning to the White House. During Trump’s second campaign, he became a crypto-friendly candidate. Additionally, Trump proposed establishing the “Department of Government Efficiency (DOGE),” which sparked a strong market reaction.

The department’s name, coincidentally abbreviated as DOGE, created strong associations and expectations in the market. On November 5, after the results of the 2024 U.S. presidential election were essentially confirmed, Dogecoin’s price quickly rose by over 30%. \

On November 12, 2024, the “Department of Government Efficiency” was officially announced, with Musk leading it. This news further boosted market interest in Dogecoin, and its price surged by more than 20% in a single day, breaking past $0.4, and its market capitalization shot up, becoming the sixth-largest cryptocurrency. (As of the latest update, it is the seventh-largest cryptocurrency but still the leading meme coin.)

Cryptocurrency Market Capitalization Ranking (Source: coinmarketcap)

Musk’s star power attracted new investors and strengthened market expectations for Dogecoin’s future. The establishment of the “DOGE” department and Musk’s involvement led the market to believe that Dogecoin might no longer be just a cryptocurrency, opening up more possibilities for its future. As Trump begins his second term as U.S. president and Musk officially enters the U.S. government operations, coupled with the increasing adoption of cryptocurrency payments, Dogecoin is bound to become a hot topic in the market.

Elon Musk’s tweet from August 20, 2024 (Source: x)

Elon Musk’s tweet from November 16, 2024 (Source: x)