Musk has continued his irrational control over the crypto markets, causing speculators to flow towards the 'meme' coins that he continually tweets about. For those of my regular readers, they would be aware that yesterday I spoke about Elon's influence, but today I am here to give an example: baby doge.
To all who thought that Elon's hold over the crypto world was weakening, there was sad news yesterday when he sent baby doge up by approximately 100% in one day! What is even more ludicrous is the tweet that sent the coin skyrocketing. Go ahead and see it for yourself. People who take these tweets as financial advice are simply gamblers and it is only a matter of time until they get burnt... badly. And I believe rightly so!
Baby doge does promise to have more substance than it's 'father', but it is debatable as to whether Doge has any merits that can't be found in any other slightly more respectable coin.
The coin promises to have foster transactions speeds along with being deflationary. This means that supply gradually decreases, with the theory being that basic economics leads to a price increase. This therefore points to it being beneficial to early adapters, and perhaps this is correct and I am missing out on a potential windfall. However, I strongly suspect that those who drove up the price have absolutely no clue over the fundamentals relating to the coin, other than Tesla man likes it, so to the moon it goes!
This is highly frustrating and a disgrace to the crypto world. If respectability is the goal, then we can't have a man with a Twitter account causing volatility! Imagine if Elon was causing the prices of a countries currency to change. This would never happen, and it shouldn't be different in crypto.
Coins should be based on the merits of the fundamentals and not the popularity created from Musk, and in the short term rational supply and demand should dictate the price.
Another aspect of this story that shouldn't be forgotten is why exactly does baby doge exist? I would dare say it is based off a pure profit grab capitalizing on Doge's popularity. There is no attempt by the founders at creating an innovative product that shakes up the industry, it is simply slight changes to an existing coin. There is little attempt to change much else, as even the logo is fairly similar. They should be called out for this, as when products are created to simply try catch on a trend rather than add value, society misses out.
Let's hope that this rot ends with Elon and a sense of rationality enters the market to make it reputable!
Until next time,