Less than two weeks after Dogecoin’s (DOGE) price and trading volume exploded after a TikTok challenge went viral, the meme currency has been in the headlines again. This time, Elon Musk’s humorous tweet briefly reversed the downward trend the asset had entered since the TikTok momentum began to wear off.
While the latest development may reinforce the impression that Dogecoin only thrives in the fleeting and whimsical cycles of Internet attention, it should not obscure the potentially more important lessons of its earlier user-driven momentum.
The meme factory meets the meme currency
TikTok, the video sharing application acclaimed as the fastest growing social networking service in history, provides a perfect environment for creating and disseminating audio-visual memes. TikTok’s challenges represent a particularly viral form of communication where information travels at lightning speed, potentially multiplying user engagement by orders of magnitude in a matter of days.
The user of the jamezg97 video application started posting videos calling other TikTok users to invest in Bitcoin Revolution at the end of June, but it was the user’s posting on July 2nd that seems to have triggered the subsequent increase in purchases. So far, the video has registered more than 1.1 million visits.
Elon Musk sees the future of the „Dogecoin Standard“, DOGE price increases by 14
From the start of the sharp upward movement around July 6 to the peak on July 9, the price of the currency has more than doubled from $0.0023 to $0.0049, while the daily trading volume has increased tenfold from around $110 million to $1.1 billion, according to CoinMarketCap data. Google Trends data showed a corresponding increase in Dogecoin-related search terms around the same time. From then on, the short-term effect of the TikTok campaign started to decrease.
As an ironic meme-inspired coin designed in 2013 to appeal to a broader, less tech-savvy audience than Bitcoin’s faithful, Dogecoin adapted well to resonate with TikTok’s entertainment base. Another selling point has been the miniscule price of a single coin, which has probably hidden the fact that bringing it to $1 as proposed would require a percentage increase of tens of thousands.
The response of the crypto ecosystem
Regardless of the motivations that have triggered the influx of new users, some market participants were quick to deploy the infrastructure needed to accommodate them. On July 9, the OKEx crypt-currency exchange platform announced the launch of leveraged spot trading, perpetual swaps and savings features on Dogecoin, while Binance opened perpetual futures contracts.
OKEx CEO Jay Hao explained the decision to expand Dogecoin’s offering in the sense that despite the reputation of an asset-memoire, the currency is not a joke as it is fully functional as a payment method and has a strong community. Another important commercial platform to quickly include Dogecoin in the list was Bitfinex, whose technology director, Paolo Ardoino, referred to Doge’s internal dialogue style in a tweet: „How wonderful! MegaDOGE at @bitfinex ! Drop the gud boi!!!!!!!!!“ Ardoino sounded more reserved when talking to Cointelegraph, saying that the decision to list the asset was made in response to consumer demand:
„We always listen to our user base and try to offer the tokens they want to market. I cannot comment on the sentiment of either token. As an exchange, we are token agnostic. We simply provide a platform where people can trade. …] As an exchange, Bitfinex supports financial inclusion, so we see this as a broadly positive trend, but investors always have to consider the risks carefully.