Key Takeaways

• Dogecoin’s value saw a significant surge when Elon Musk changed the Twitter logo to the Dogecoin dog
• Meme season may be coming to an end, according to our Analyst
• Open interest rose to its highest level since November
• Musk remains unfazed by a $258 million lawsuit alleging he pumped and dumped the Dogecoin price

It appears 2021 is back in full swing. 

This year may be remembered by many for its masks and social-distancing restrictions, but for Dogecoin investors, it will remain a fond memory. 

The meme coin exploded onto the scene, giving investors a return of more than 3500% as it skyrocketed from $0.004 to a peak of $0.73. 

Unfortunately, meme coins don’t typically offer any real value, and so when the crypto market collapsed in 2022, Dogecoin followed suit. The days of Robinhood investors making a killing on obscure tokens ended abruptly, and the party quickly died down. 

Elon’s Dogecoin Revival

However, it’s 2023 now and Dogecoin has seen a 39% increase in value over the past three months. 

This was largely thanks to Elon Musk, who rolled back the clock with a classic Dogecoin joke. He changed the logo of Twitter to the Dogecoin dog and, of course, announced it on the platform. 

As promised pic.twitter.com/Jc1TnAqxAV

— Elon Musk (@elonmusk) April 3, 2023

The result was an immediate 30% jump in the coin’s price. Before Musk’s endorsement, Dogecoin had been lagging behind the rest of the market, with a year-to-date increase of 13%. Bitcoin and other tokens, however, had seen massive gains as expectations surrounding interest rates shifted to a more dovish outlook. 

Derivatives markets reflected the surge as well. Open interest, which measures the number of open contracts traders have, shot up to its highest level since the FTX crash last November, according to data from Coinglass. 

What’s Next?

Predicting the short-term value of any meme coin is a challenge, but it’s hard to ignore the fact that meme season may be drawing to a close. 

This market environment is far different from the hysteria of 2020 and 2021, when people were receiving stimmy checks and new investors were flooding into crypto. Interest rates have risen rapidly, tech and crypto stocks have taken a hit, and inflation is skyrocketing as recession fears mount. 

The novelty of memes, and crypto in general, has worn off. The Dogecoin story is no longer a new one, with its pumps and dumps now common knowledge. This may mean there is less FOMO and less mainstream attention for the coin than before. 

Scandals have rocked the crypto world in the last year, tarnishing its reputation. With the scale of the bear market still fresh in investors’ minds, it’s hard to imagine Dogecoin being able to reach the same heights as it did in the past. 

But, at the end of the day, this is a meme, and memes don’t follow any logical rules. I have never been one to “invest” in memes, much to my wallet’s dismay in 2020 and 2021, but perhaps I just don’t get it. 

Who knows what Musk is up to? Maybe he really does intend to incorporate Doge