In yet another strange twist of the markets driven by memes and social media, an obscure cryptocurrency called Dogecoin has skyrocketed in value after a viral tweet from Elon Musk. Musk, the CEO of Tesla and one of the wealthiest people in the world, has a dedicated Twitter following and commands a deal of respect within some online communities.
The meme-inspired Dogecoin was originally created in 2013 following the explosion in popularity of the “doge” meme, which has a small, nonplussed-looking Shiba Inu dog looking at the camera surrounded by multicolored Comic Sans text. The currency was created as a joke in the aftermath of the sudden surge in value of Bitcoin and other cryptocurrencies of the era.
Tesla Driving Crypto Demand Sky-High
Dogecoin rallied immensely over the weekend and on Monday, shooting to around $10 billion in market value. Astonishingly, this brought it to the number ten spot among all digital coins, far higher than it had ever ranked previously.
Part of the sudden increase in interest in the coins comes from retail investors, hot on the heels of the GameStop incident that saw that company’s stock artificially inflated to spite short-sellers. These amateur investors, spurred on by tweets from Musk that humorously highlight the digital coins, have dramatically increased demand for the joke currency.
Related: GameStop Stock Still Trending Up as Unusual Short Squeeze Continues
In addition to tweeting about Dogecoin, Musk has directed his company, Tesla, to buy Bitcoin at a high rate. The company bought $1.5 billion in Bitcoin recently, and has stated it will begin accepting Bitcoin as payment for its vehicles. Musk has told reporters that he believes Bitcoin is on the cusp of widespread acceptance.
Movement Suggests Market Instability
While retail investors and Musk might be having a laugh at the volatility, some experts warn that it could underscore something darker happening behind the scenes. After several retail rallies spurred on by social media, some are beginning to question whether meme stocks are here to stay.
Such a scenario could be problematic for professional investors. If the markets can simply be upended by a viral tweet, what’s to say it couldn’t be crashed by a concerted effort from bad actors? This kind of instability has some investors spooked, and has spurred calls for new regulations on the speed of amateur trading.
Related: Prominent Investor Warns Markets are “Broken” and Were Before Gamestop
Amateur traders themselves, however, view such calls as an attempt to keep average people from making money in the stock market. Popular memes on social media are calling Wall Street hypocritical for calling on the SEC to regulate amateur trading when professional investors use tactics to manipulate the markets with {what users perceive as) regularity.
