LANSING, Mich. (WLNS) – What do the moon , a dog meme, and Elon Musk have in common? Apparently, Dogecoin.
The cryptocurrency is the hottest commodity on the internet right now, and it has about as weird of an origin story as you can find.
“Dogecoin is a unique one because it started as kind of a joke,” said Tom Holt, a Professor in the School of Criminal Justice at Michigan State University and a cryptocurrency expert.
Holt said Dogecoin was started by two friends in 2013 who thought it would be funny to make fun of the crypto industry by using a viral picture of a dog as their mascot.
“People thought it was funny, people started investing in it, and similar to some of the other financial events over the past year like say the stuff with Gamestop, the more attention that gets put on Dogecoin the more its value increases.”
Enter: Elon Musk.
The Tesla founder and internet darling has been a vocal backer of the cryptocurrency, giving it that much-needed attention to flourish.
“Elon Musk has been one of the drivers to some extent to the value of Dogecoin and the more he ties it to some of the stuff they’re doing with SpaceX, the more that’s going to affect its price,” said Holt.
Holt says long term, he doesn’t know if the model for Dogecoin is sustainable. For example, when Musk hosted Saturday Night Live, he mentioned Dogecoin. Then, it crashed.
More than anything, Holt said Dogecoin is not something you should just go into blind because you have a fear of missing out.
“From that sort of FOMO perspective, crypto is not something to just throw your money at because there is still a bit of risk to it. It is like any other type of stock or asset in that its value can fluctuate and there are tax implications if you do make a profit,” said Holt.
Even financial experts will tell you cryptocurrencies are hard to figure out, and it’s not always clear what will cause their value to change.
“What you need to know about Dogecoin, or really any cryptocurrency, is that it is to a certain extent like a commodity. Like other stocks or bonds or other valued goods. And so you can add it to your investment portfolio and watch it increase or decrease. So there is value in thinking of it like that,” said Holt.
Most businesses still don’t accept cryptocurrencies as payment, meaning that it’s not generally useful for the average consumer.