Is DOGE really worth the hype even after Musk’s Twitter buyout?

2022 continues to be a 12 months of surprises, with one of many largest up to now being Elon Musk’s determination to acquire social media juggernaut Twitter for a whopping $44 billion. Whereas the takeover has set into movement an entire host of debates — notably these pertaining to Massive Tech censorship — it has additionally referred to as into query the way forward for Dogecoin (DOGE), a digital forex of which the billionaire has been a giant proponent during the last couple of years.

To place issues into perspective, simply hours earlier than Musk tweeted that “the chicken is freed” on Oct. 27, the worth of DOGE was hovering round $0.07. Nevertheless, by Nov. 1, it had surged to $0.16, bringing the whole market capitalization of the so-called memecoin to a large $21 billion. And whereas DOGE is presently buying and selling near $0.08, its 30-day revenue ratio is bigger than 40%.

It is usually value noting that each time Musk has tweeted in help of the digital asset, its worth has skyrocketed fairly dramatically. For instance, all through 2021, he continued to refer to DOGE because the “individuals’s crypto,” a message that despatched the forex’s worth flying by a whopping 4,000% over the course of the 12 months.

Furthermore, Tesla — an American multinational automotive and clear power firm helmed by Musk — began accepting DOGE as payment for its merchandise in January 2022, together with its “Giga Texas” belt buckles and miniature automobile replicas. Moreover, Musk’s lately launched joke perfume, Burnt Hair, is also bought with DOGE.

A bleak future for DOGE?

To get a greater concept of whether or not Musk’s Twitter takeover and fixed help of DOGE stand to make an indelible mark on the digital forex’s monetary future, Cointelegraph reached out to Lior Yaffe, co-founder of Switzerland-based blockchain software program firm Jelurida. Yaffe doesn’t have an excessive amount of religion in Dogecoin, judging from the poor decision-making displayed by Musk up to now, including:

“From paying an excessive amount of for Twitter to inflicting companywide mayhem by firing many good workers and making horrible administration selections such because the blue test episode, I’m not optimistic about both Twitter or Dogecoin.”

Moreover, he claimed he could be shocked if Musk can convey any actual use circumstances to Dogecoin, noting that even when Musk intends to by some means combine Twitter with crypto funds — which is a really troublesome job — he doubts they may be capable to obtain such a dream within the close to future. “Even when they do handle to construct a cost system round Twitter, there are a lot better blockchain options than Dogecoin to select from close to safety, privateness, good contracts and scaling,” he said.

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Henry Liu, CEO of cryptocurrency change BTSE, advised Cointelegraph that after making an allowance for the present macroeconomic setting, he foresees the worth of DOGE persevering with to stay extremely risky, a lot in keeping with the crypto market.

“We count on DOGE to remain speculative within the brief run, and there must be lowered liquidity and buying and selling volumes throughout numerous platforms. If DOGE might be given new utility relating to its collaboration with Twitter, we might foresee a spike pushed by social media communities,” he stated.

Not everyone seems to be so skeptical

Nikita Zuborev, chief analyst for cryptocurrency change BestChange, advised Cointelegraph that whereas one can not low cost the truth that the expansion of meme tokens usually occurs instantly and unreasonably, Musk’s current acquisition of Twitter might doubtlessly increase DOGE’s value, primarily as a result of one can not rule out the potential for the asset being built-in into the agency’s social community ecosystem sooner or later. He added:

“If that occurs, then the beforehand ineffective memecoin will flip into the platform’s central management token of types, reaching an enormous viewers within the course of. Such a change will be capable to convey the coin a number of use circumstances, one thing that many buyers are betting on.”

To additional strengthen his argument, Zuborev pointed to the upcoming launch of the SpaceX-backed Doge-1 lunar satellite tv for pc, which is immediately associated to the model of the coin. “These sorts of strikes stand to impress excessive demand in DOGE’s market and value progress,” he claimed. 

That being stated, he did concede that so long as the asset’s major promoting level stays rooted in its meme-centric outlook, it will solely be sensible so as to add the forex to 1’s portfolio simply to diversify it. Nevertheless, as a standalone funding, he doesn’t give a lot benefit to DOGE.

“In addition to Dogecoin, Musk has repeatedly spoken fairly positively about Bitcoin as effectively, a crypto that’s way more secure and might be built-in into Twitter’s ecosystem simply. One can contemplate it as an alternative choice to DOGE, particularly to capitalize on Musk’s continued market manipulations,” he stated.

DOGE’s utility remains to be minimal, and that’s a reality

Because of Musk’s affinity for Dogecoin and his current takeover of Twitter, it stands to motive that hypothesis relating to the asset’s value will run amok, not less than for some extra time. That being stated, the very fact stays that Dogecoin as a crypto venture remains to be fairly restricted in its operational utility, a sentiment echoed by Daniel Elsawey, co-founder and CEO of decentralized change TideFi.

Taking a extra holistic view of the matter, he advised Cointelegraph that cryptocurrencies within the digital asset house as we speak fall into two distinct classes: these with good contract capabilities and people with out. In his opinion, the market as an entire is transferring towards the tokenization of things in our day-to-day lives, and that is what stands to tip the adoption curve of digital property towards one facet or the opposite. He added:

“On condition that DOGE can not immediately work together with good contracts as a part of its authentic design, I’d say that except it’s particularly used as an possibility for cost, the use circumstances related will proceed to stay speculative.”

Lastly, provided that the crypto trade remains to be in its relative infancy, it continues to stay closely depending on Bitcoin (BTC), tracing its value actions fairly closely. Furthermore, volatility continues to pervade the market because of the current downfall of crypto change FTX, one thing that can have a direct impact on the worth of most cryptocurrencies within the close to to mid-term. “Dogecoin is not any completely different on this respect. There’s nonetheless a whole lot of uncertainty surrounding the asset,” Elsawey concluded.

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As we head right into a future pushed by a excessive diploma of financial turbulence — throughout a myriad of economic sectors — it will likely be fascinating to see how the way forward for Dogecoin performs out transferring ahead, particularly as tasks with restricted use circumstances proceed to be worn out from the market seemingly with every passing day.