Crypto is conflicted.
Leading projects, including Bitcoin and Ethereum, have attracted significant attention from Wall Street, which now, at last, is taking cryptocurrency’s value propositions quite seriously.
And then you have the dog coins, the meme coins, the joke coins: starting with dogecoin (DOGE) and its knock off, shiba inu (SHIB).
The ever-institutionalized digital asset industry pretends it’s above such nonsense, but these tokens remain some of the most valuable. Both DOGE and SHIB are within the top 15 cryptocurrencies by market capitalization — the former nearly worth more than venture capital darlings Solana and Polkadot combined.
It’s an uncomfortable quirk, one increasingly exacerbated by Elon Musk.
Ever since the SEC targeted the maverick billionaire for influencing Tesla’s stock price with his tweets, Musk has turned engagement-farming dogecoin diehards into sport, leading to a clear correlation between the Tesla founder’s tweets and the price of DOGE.
Musk has tweeted about dogecoin dozens of times over the past few years — sending it higher more often than not, albeit typically temporarily. It makes some degree of sense: traders lust for short-term price signals to pump and dump so-called shitcoins, trapping naively eager newbies into dangerous momentum plays in an infamously volatile asset class.
So, quelle surprise that DOGE more than doubled this week as Musk prepared to take over Twitter following his long-awaited $44 billion leveraged buyout. And queller surprise-plus that Musk tweeted a picture of his pet Shiba Inu rocking a smock with a giant Twitter logo as that pump reached its crescendo, further fanning the pungent odor of speculatory bear market shenanigans.
It’s a pump driven by the frothy DOGE faithful pining for Twitter to integrate their favorite token for microtransactions and payment processing more broadly. This is despite the social media giant already supporting tips in bitcoin and ether for more than a year. And there’s a potential new avenue: Musk’s plans to charge for verified accounts.
Wary, seasoned investors might look to value Dogecoin by its fundamentals. Musk was once interested in supporting Dogecoin development, its developers say, back when Tesla was eyeing its first bitcoin purchases. The idea was to work with its few remaining builders to optimize its throughput, fleshing out its potential utility as the meme-currency of the internet.
Throughput is not exactly a pressing concern for the network, considering practically nobody uses it (Dogecoin’s transactions are almost 90% lower than Bitcoin’s; boomer-chain Litecoin sees three times the amount; and even bygone network Ethereum Classic boasts about double.)
An open secret of crypto, though, is that clear fundamentals are inherently bearish for most blockchain valuations. Price discovery and related volumes are still mostly driven by pie-in-the-sky concepts of what might one day become of a favored protocol.
Still, sans-network effects, centralization of supply could prove a worthy reference. Half of all DOGE belongs to just 10 wallet addresses, 35% of which is custodied directly on Robinhood and Binance — one click away from sell-side order books.
Zooming out, the top 100 Dogecoin addresses control, ironically, 69% of supply. The top 100 bitcoin (BTC) addresses, meanwhile, command less than 16% of all BTC in circulation.
These stats should concern all DOGE holders, especially last year’s millionaires who’ve turned their stacks into their savings. A small number of whales have turned Dogecoin into a zero-sum game of hot potato. The preeminent strategy for everyone else: Trust the — often anonymous — whales to not crash the price, so, one day, they themselves might become the whale and dump their own, instead.
But there’s an even bigger threat: Musk’s fleeting attentiveness is now its primary value proposition — proving centralization of attention is a specter already haunting the most recent wave of buyers.
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This news is republished from another source. You can check the original article here