Remember the good old days of 2021? Crypto investors enjoyed all-time highs as the entire asset class hit a peak value of more than $2.8 trillion, and just about every cryptocurrency reached a new record.
Yet arguably the most talked-about cryptocurrency to come out of the 2021 market was Dogecoin (DOGE -0.99%). The now-popular meme coin started 2021 trading for less than a penny, yet by May, it skyrocketed to a price of nearly $0.70. It was able to reach those heights thanks in large part to a huge push from retail investors that drove up its price.
The movement gathered so much momentum that the richest man in the world, Elon Musk, started to take notice. Musk often took to Twitter to promote the meme coin. His tweets varied from topics disclosing that he was working with Dogecoin developers “to improve system transaction efficiency” to even announcing that his electric vehicle company, Tesla, would be accepting Dogecoin as a form of payment for merchandise. Thanks to his efforts, Dogecoin continued to soar and reached its pinnacle when Musk hosted Saturday Night Live and referred to himself as the Dogefather.
After the Saturday Night Live appearance, however, Dogecoin started to tumble. By the end of 2021, it was trading for just about $0.17. It declined further in 2022, falling as low as $0.03.
The future of Dogecoin
But in late October, Dogecoin got a spark. In just a few days, its price rose from $0.05 to $0.14, thanks to the Dogefather himself. After months of negotiation, it was confirmed that Musk would be buying Twitter.
Dogecoin holders and enthusiasts immediately began to speculate that Musk’s takeover of Twitter would lead to some sort of revival for the once-popular meme coin. The rise in price after Musk’s purchase was based on pure speculation, but there might actually be some merit to the idea that Dogecoin’s best days lie ahead.
Now that Musk is at the helm of Twitter, it’s been surmised that some sort of crypto functionality could come to the platform. Musk has a history of advocating for cryptocurrencies (not just Dogecoin), and a $500 million contribution from the world’s largest crypto exchange, Binance, to help fund his purchase of the social media platform seemed to hint that this crypto functionality might be inevitable. In addition, leaked documents showed that Twitter was working on a digital wallet for users.
To take it a step further, a recent application by Twitter Payments LLC to register as a money transmitter was made public this week. The application was filed with the U.S. Treasury Department Financial Crimes Enforcement Network and can be found on its website.
Approval of this application would allow Twitter to set itself apart from other social media platforms that lack payment functionality. These signals point to a future in which crypto makes its way to Twitter. And what would a crypto-enabled Twitter be without Musk’s favorite meme coin?
The case for $1
If Dogecoin gets the nod for Twitter integration, it could provide the fuel for its next jump. For most of Dogecoin’s history, people couldn’t do anything with it. Other than buying some Tesla merchandise, Dogecoin still lacks utility today. But if Musk were to incorporate some sort of legitimate application of the cryptocurrency into Twitter, it could provide the fuel for Dogecoin to reach the coveted $1 mark.
For that to happen, Dogecoin would need to grow by more than 1,000%. That’s certainly a lot of ground to cover, but stranger things have happened. Just look back at 2021.
At the peak of the Dogecoin hype last year, when asked about the odds of Dogecoin sticking around for the long haul, Musk said, “Fate loves irony,” a reference to Dogecoin origins as a spoof of other cryptocurrencies yet could actually become a real currency. In his eyes, “the most entertaining outcome is the most likely outcome.”
And what would be more entertaining than the cryptocurrency that was originally created as a joke becoming a form of payment on one of the world’s most popular social media platforms?
Maybe Musk’s own advice would be most applicable. In May 2021, he said that while there’s a legitimate chance that crypto “could become the future currency of Earth,” you shouldn’t “invest your life savings.” By no means does news of Twitter filing to become a payment company warrant an entire portfolio’s worth of Dogecoin, but there are legitimate reasons to believe that Musk will continue to pioneer a path for the meme coin to become more mainstream.
A year ago, I would have called Dogecoin a one-hit wonder, but with Musk’s takeover of Twitter, the meme coin might have what it takes to stick around for the long haul.