Who would have envisioned that a dog-themed meme coin would ever become a legit method of payment for one of the biggest companies in the world!
This is now a reality thanks to Elon Musk!
Well...for those not familiar (if any), Elon Musk announced on Twitter on Jan 13 that Tesla would accept Dogecoin for merchandise
In May, Musk conducted a poll on Twiter asking whether Tesla should accept Dogecoin, and the result was a clean sweep for Doge army!
Moreover, Musk mentioned on multiple occasions that he thinks Doge is superior to Bitcoin for payments
The transaction value of Bitcoin is low and the cost per transaction is high. At least at a space level, it is suitable as a store of value. But fundamentally, Bitcoin is not a good substitute for transactional currency,” source
Just last month, he tweeted the following:
And Finally, on Jan 13, the long wait is over:
source
And as you might guess, Dogecoin price positively reacted to that announcement with about a 30% surge. It is something that illustrates how much influence Elon Musk has to the level of being able to move the price of a cryptocurrency with a market cap of around $25 billion, with only a single tweet!
Is this good or bad for cryptocurrency:
At the face of it, it clearly seems one of the most positive events that have happened to the crypto space to date! One of the largest companies led by the richest man in the world is officially adopting a long-established cryptocurrency...
Things couldn't be better than that
It's bullish, positive, and good news, right?
Well, I sincerely hope it is...
However, when I look at Dogecoin distribution, I can't help but feel scared about what may happen to this coin in the future. It's something I mentioned in previous posts and noticed that almost everyone has the same concerns about...
Let's take a look...
You see... the top wallet is holding over 23% of the entire Doge market while the top 80 address acquire a whopping 62%
You can hardly find another coin in the market that has more centralized distribution than Dogecoin
Sometimes, I find myself wondering who stands behind those wallets, how much are they "committed" to Dogecon, and what would happen if they suddenly decided to start dumping...
Back to the top wallet as it is the most interesting
According to the blockchain data, the whale behind that wallet seems to have purchased most of his/her holding in November when the price of Dogecoin was hovering around $0.25 level.
So far, the investment is not doing well in terms of USD. As you can see (the red line), the dollar value is generally decreasing.
Who has mustered up enough courage to invest in Dogecoin with such a huge amount of money? Who was crazy enough to take such a risk? Nobody knows for sure. My hunch tells me it's no one else than Elon Musk, however (just a hunch).
Still, the fact that there is somebody holding almost a quarter of the entire supply is no good for any crypto, especially if it is all about fun and joke
If the top-100 or even only the top-10 wallets start dumping it is easy to envision how disastrous things are going to be. In a word, it will be GAME OVER for Dogecoin no matter how bullish Elon's tweets are...
I'm never trying to spread FUD nor am I a strong believer in conspiracies, but the figures above are clear and straightforward.
Remember, figures and math never lie and today they are telling only one thing:
Dogecoin is still highly risky...
Honestly, though, I don't care about Dogecoin itself as I don't have a single token of it. But I wonder how the media the newcomers would see the matter of collapsing a well-known coin that has long been on the top-ten rankings
Keep in mind, newcomers know little about cryptocurrency and how it works. They would most likely try to draw parallels between Bitcoin, Ethereum, and other blue-ship currencies with Dogecoin and think that what happened to Doge could be repeated to others, which is something that couldn't be further from the truth.
I can also imagine the media "fishing in trouble waters" if such a negative scenario ever occurs
This actually happened before when the infamous Btconnect ponzi scheme collapsed. Most main media back then took that bad boy as a live example of the repetitive and traditional bullshit: "crypto is based on hot air and has no real value"
While dogecoin is not a centralized Ponzi scheme, its bad distribution mostly rhymes
To me, Dogecoin is a joke. Will always be. It is a far cry from Bitcoin and whatever happens to the former doesn't apply to the latter
It can be fun sometimes but has nothing to do with other large-cap cryptocurrencies such as Ethereum, BNB, DOT...etc
There is no economics nor technology behind Dogecoin, and almost the only thing that makes it valuable is the tweets of the cult-like figure- Elon Musk.
This is how I see Dogecoin and this is how I hope other people to see it
What do you guys think about Dogecoin? and how do you see Tesla's move to accept it and a method pf payment?
I'm keen to learn you opinion and thoughts...