DOGECOIN TO THE MOON? A SKEPTICAL PERSPECTIVE.
Updated: May 22
To offer an opinion on a non-legal topic, here is what I think the primary problem is with the notion that, at this point, the cryptocurrency Dogecoin will one day “go to the moon.” Or at least some much more distant moon.
Dogecoin is a cryptocurrency that features the face of an Shiba Inu dog. It was developed in 2013 by a software engineer named Billy Markus, who also goes by the name Shibetoshi Nakamoto. It was originally meant to be a joke, a parody of the other cryptocurrencies. But to date it has become the fourth most valuable cryptocurrency in the world. It’s basically DoggyCoin but spelled how it's pronounced (a phonestheme), which lends its name a bit of “Dojo” resonance.
During the Covid-19 pandemic, Dogecoin became a national obsession. Multitudes of investors, many of whom had never traded before, speculated substantial sums of money on the future prospects of Dogecoin. The “new generation of investors” were in great part drawn into trading by social media, enabled the decentralization of trading with online platforms such as Robinhood, and inspired by the unprecedented GameStop tour de force where a group of online traders drove GameStop's price up from $24 to over $400. Many of Dogecoin's early investors have seen an almost unimaginable return on their investment. Investors who invested all of the Government's stimulus checks on Dogecoin, could have realized more than $500,000 in profit.
That being said, many, if not most of the opinions on Dogecoin's prospects of going to a much more distant moon, have missed the most important point:
The problem with Dogecoin is not so much that it does not exist, or that it has no real basis of value, but rather that too much of it exists.
Whereas there are only 21 million Bitcoin, there are over 128 billion Dogecoin. In other words, for Dogecoin to go from fifty cents to a dollar would require an extra 60 billion dollars of investment. This is about equal to the average daily consumer spending of the entire United States, most of which is not discretionary income.
To take it a bit further- perhaps to the moon- for Dogecoin to go up to five dollars, for example, would require over a half of a trillion dollars. For it to go to one-hundred dollars, over a hundred trillion dollars.
One reason that Dogecoin has risen over 20,000% in the last year (as of May 2021) is that Americans poured approximately 10% of their 380 billion dollars of stimulus payments into cryptocurrencies. I would suggest, however, that us receiving thousands of more dollars from the government any time soon is at best speculative.
All of that being said, how much of a chance is there for Dogecoin to go to “the moon”?
What going “to the moon” usually means is that a person believes a stock, usually a “penny stock” or cryptocurrency, is going to see a huge price increase. It can be aspirational, motivational, an expression of conviction.
The big moment when Dogecoin was supposed to finally go to the moon, was Elon Musk’s May 8th, 2021 appearance on Saturday Night Live (SNL).
If this is not entirely congruent, given Dogecoin’s meteoric rise, there is not just one moon, but after you have reached the moon there is always another moon.
In anticipation of Elon Musk’s appearance on SNL, Dogecoin surged to 71 cents.
The very second SNL aired, however, Dogecoin plummeted in a single, straight line back below 50 cents. It happened in a second or two, in a flash, faster than any human being could possibly consider what was happening long enough to sell off their Doge. And the seemingly blatant nature of the dump convinced many that the Dogecoin phenomena, in great part, had evolved into a classic pump and dump scheme.
But who knows? Perhaps a year from now, Elon Musk and his Space X program will actually put a Shiba Inu on the moon, as he is now claiming. Indeed, a Shiba Inu landing on the moon would be such a brobdingnagian spectacle that the price of Dogecoin would probably go through the roof. Through the roof, I can see. After all, most Americans understand the Andy Warhol reality that such an astronomic spectacle can and will be monetized.
Perhaps. And perhaps the very second a Shiba Inu does land on the moon, Dogecoin will once again plummet in a blink or two- and once again financially devastate countless investors, making a handful of extremely wealthy people that much wealthier. A counter-narrative is that yes, Dogecoin is a "hustle" as Elon Musk said on SNL, later elaborating "it's the people's hustle." Both can be true. I suppose it depends on how skilled you are at the hustle.
Many people do, of course, learn from their mistakes, and if a actual Shiba Inu does reach the Moon's orbit, many will try to sell their Dogecoin a day or two before the landing happens. Which is why, if I were to hazard a guess, this time Dogecoin's price would plummet days before the big event.
That being said, there is another problem with speculating on a Shiba Inu landing on the Moon. Sending a rocket to the Moon may be far less difficult than sending a Shiba Inu to the moon. Of the 60 or so dogs that have been launched, only a few have made it as far as the Earth Orbit. For various reasons, including that many did not survive and most early attempts were sub-orbital. The record for the longest time a dog has survived in space was set by the Russians in 1966, a 21-day orbit around the Earth.
Ultimately, speculating on Dogecoin to go to some much more distant moon is a risky venture. You cannot really buy low anymore, depending of course on what you consider to be buying low. Already up over 20,000% in the past year is usually not considered buying low. But who knows? If you are inclined to hold Dogecoin for a few decades, Elon Musk might put a Shiba Inu on Mars and, as he has assured us, a Mars economy will run on cryptocurrency. Presumably Dogecoin. If so- if that were to happen- then perhaps having bought in at even five dollars will seem like you had bought low.
As the title suggests, I am skeptical about when and for how long and in what way Dogecoin is likely to go to “the moon,” unless by “the moon” Dogecoin’s promoters mean that it might go up to eighty cents or even a dollar. So, for whatever my opinion is worth, I would not recommend throwing more money than you can afford to lose on what, at some point, could half vanish in the time it takes a Shina Ibu to shake off its space madness.
I could be wrong. I am certainly not giving investment advice. But when it comes to any kind of market speculation, nobody can actually realize a profit unless that profit is coming out of someone else’s pocket. After what happened with Elon Musk’s appearance on SNL, I suspect that many of Dogecoin investors have learned some important lessons. The question is, are they the right lessons? One can of course only speculate. Only time will tell. After all, the astonishing rise of Dogecoin is somewhat unique and unprecedented.
May 16, 2021. © Michael N. Bress, Esq.
For more information on space madness, see episode 105 of the Ren and Stimpy Show, or read some brief histories of mankind's attempts to send animals, specifically dogs, into space. Dogs, apparently, need to walk around and on this Planet.
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