Dogecoin Soars on Trump's Presidency Win. Here's Why That's Not Just a Fad.
11/26/2024 21:31
Dogecoin (CRYPTO: DOGE) is no longer a sleeping dog. In the aftermath of Donald Trump winning the U.S. presidency, Dogecoin has been one of the hottest performers in the crypto market. Is this yet another example of a meme coin exploding in value due to hype and buzz, or is there something really behind Dogecoin's recent resurgence?
Dogecoin (CRYPTO: DOGE) is no longer a sleeping dog. The world's most popular meme coin is now up 188% over the past 30 days, and a staggering 340% year to date. In the aftermath of Donald Trump winning the U.S. presidency, Dogecoin has been one of the hottest performers in the crypto market.
What's going on here? Is this yet another example of a meme coin exploding in value due to hype and buzz, or is there something really behind Dogecoin's recent resurgence? Let's take a closer look.
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Dogecoin's return to prominence has been fueled by the pro-crypto optimism surrounding the Trump administration. On the campaign trail, Trump made several pro-crypto promises. While none of them pertain specifically to Dogecoin, they do point to a new pro-business regulatory regime for crypto, as well as the growing mainstream acceptance of crypto within the investment world. All of that, of course, would be positive for Dogecoin.
But what really seems to be behind Dogecoin's breakout is the unofficial support of billionaire Elon Musk, who has been tasked by Trump with creating a new Department of Government Efficiency, or DOGE for short. As a result, "DOGE" has been making headlines in the traditional financial media and on social media. Since DOGE is the ticker symbol for Dogecoin, it's easy to see why crypto traders have been rushing to buy this meme coin.
While Musk has never officially said that Dogecoin would become a part of the future of DOGE, the anticipation is that somehow the tech billionaire will find a way to integrate crypto into its strategy. Maybe Musk will help make it possible to pay your taxes in Dogecoin instead of dollars one day?
It's the same kind of anticipation that stoked a mini-rally in Dogecoin when Musk acquired Twitter (now known as X) in April 2022. Crypto bulls thought Dogecoin integration for Twitter would be coming soon, given Musk's prior support for Dogecoin. More than two years later, it has thus far not materialized.
If it were just Musk banging the drum for DOGE, it might be easy to ignore the latest Dogecoin hype. After all, we've seen this same story before with Twitter. But now a number of high-profile business leaders are starting to talk up DOGE. One of those is Brian Armstrong, CEO of Coinbase Global.
According to Armstrong, DOGE -- the government entity, not the coin -- is all about economic freedom, reducing the size of government, and eradicating government waste. He has even suggested that DOGE might lead to the abolishment of the individual income tax or a new constitutional amendment to limit government spending. So we're not just talking about a few nips and tucks to save the government some money, we're talking about huge, fundamental ideas that could influence the future of America.
That's why I think Dogecoin's recent rally is more than just a fad -- it points to something significant happening within American society. And that's not necessarily a good thing.
People invest in meme coins when they don't have confidence in traditional assets. People buy into the narrative that meme coins will make them rich overnight because they have lost faith in the American dream. And they buy meme coins instead of fiat currencies (such as the U.S. dollar) because they have lost confidence in the "full faith and credit of the federal government."
That might sound like I'm making the case for investing in Dogecoin or other meme coins. I'm not. What I'm saying is that Dogecoin's post-election rally is more than just a fun new way to play the "Trump trade" in the crypto market. It's a symptom of a much bigger problem.
In 2025, look for meme coin mania to continue. Crypto investors will likely rotate out of a core group of meme coins -- such as Dogecoin, Shiba Inu, Pepe, Bonk, and Floki -- depending on which one has the greatest momentum. Right now, Dogecoin has all the momentum, but signs suggest Floki might be next, given its new Coinbase listing.
Just one month before the election, tech billionaire Mark Cuban referred to investing in meme coins as essentially playing a game of musical chairs. It's fun playing the game, as long as you don't get stuck holding the wrong meme coin when the music stops. If you're still considering investing in Dogecoin, you should keep that in mind.
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Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Coinbase Global. The Motley Fool has a disclosure policy.
Dogecoin Soars on Trump's Presidency Win. Here's Why That's Not Just a Fad. was originally published by The Motley Fool