The ever erratic Elon Musk is back with a strange set of Tweets sending Dogecoin higher.
Tesla Will No Longer Accept Bitcoin
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP— Elon Musk (@elonmusk) May 12, 2021
High Time For a Carbon Tax
It is high time there was a carbon tax!— Elon Musk (@elonmusk) May 13, 2021
Bitcoin and Coal
To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal— Elon Musk (@elonmusk) May 13, 2021
Working With Doge Developers
Working with Doge devs to improve system transaction efficiency. Potentially promising.— Elon Musk (@elonmusk) May 13, 2021
BREAKING: First Elon Musk said Tesla was ditching Bitcoin for environmental reasons. Now he says he's working with the developers of Dogecoin to make it more efficient.https://t.co/amaQcxUcan— Futurism (@futurism) May 13, 2021
Developers? What Developers?
We are aware a new company has started offering devops services on Dogecoin. Please note this does not involve any of the team maintaining Dogecoin Core.— Dogecoin Developers (@dogecoin_devs) May 13, 2021
Futurism noted the Twitter account associated with actual Dogecoin developers immediately distanced itself from the project.
Excuse me for pointing out that working with app developers will not do a damn thing for mining efficiency and its mining that creates energy demand.
Mobile apps development firm AppSwarm Corp and blockchain research lab and startup accelerator DogeLabs.Io plan to build out a global Dogecoin development team that will focus on building applications on top of the memecoin’s blockchain.
The above snip is from Dogecoin to Get DevOps Support for Commercial Apps
Silliness of the Day
Tesla Accepting Dogecoin
How could it possibly matter?— Mike "Mish" Shedlock (@MishGEA) May 14, 2021
Think before answering. https://t.co/uqxQJr79N7
People are excited by the possibility. It is fundamentally meaningless.
People are speculating in Dogecoin. They are not going to use it to buy stuff and pay taxes on it.
Moreover, even if they did, how could it matter? Those who accept any crypto currency could immediately trade it for dollars.
There could of course be a psychological impact by sheep willing to follow the leader over a cliff.
- How could Elon Musk possibly have not understood the huge energy demand of Bitcoin?
- How much Dogecoin does does Musk have and when did he buy it?
- Is Musk purposely attempting to drive the cost of Dogecoin higher?
Questions #2 and #3 have been on my mind for a while. I did not ask them because I did not want to be accused of accusing Musk.
I am still not accusing Musk, but in light of these bizarre Tweets it's time to ask questions, and pointed ones.
Dogecoin is a Joke
It's important to step back and discuss dogecoin started as a joke, a parody on Bitcoin.
For details, please see Dogecoin, Created as a Joke, is the Epitome of Greater Fool Mania
Jackson Palmer, one of the creators had this to say. "It was a joke on a whim. ... I sat down with a beer and slapped doge's face on a coin and put it live. The next day there was heaps of retweets. ... We thought it would last maybe three days."
That is what people are speculating on.
On Jan 28, Mr. Musk, the billionaire boss of electric-vehicle maker Tesla Inc., tweeted a faux “Dogue” magazine cover. Once, he shared a meme based on the movie “The Lion King,” with the Shiba Inu dog superimposed on Simba’s face. Another time, he wrote, “Who let the Doge out,” and “No highs, no lows, only Doge.” Mr. Musk renewed his interest in the cryptocurrency in April, tweeting “Doge Barking at the Moon.”
Who's Getting Rich?
The Jist has some details in Dogecoin: Another Bubble Or To The Moon?
The Dogecoin rich list on bitinfocharts.com shows that almost 50% of the total circulating supply is held within 12 wallet addresses, with one of those wallets containing 28.42% of the total supply.
Data also shows that ~60% of Doge is held in wallets older than 1 year old, with the remaining ~40% of Doge supply being held by traders for less than 1 year.
At the current price of $0.48 Dogecoin has a market cap of about $62 billion.
Someone could have bought Dogecoin for about a penny early this year.
One wallet has about 28% of the supply. That could be hedge fund, or a corporation or an individual.
The current supply of Dogecoin is 129.5 billion as of May 9, 2021,
28% of 129.5 billion is 36,260,000,000. Purchased at a penny the purchase price would be $362,600,000.
If one made that investment at a tenth of a penny that would be $36,260,000.
Who would or could throw that much money on a joke unless they knew something or could influence the market?
Again, that wallet might not be a person and it could be someone mining and HODLing since the beginning.
But given the bizarre Tweets, it's fair to ask what Musk's holding is and when he bought it.
This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.