What happened
One of the biggest movers to the upside and downside over the past day in the cryptocurrency world is Dogecoin (DOGE 2.41%). This meme token, often tied to self-proclaimed "Dogefather" Elon Musk, has seen its token price gyrate on various Musk-related catalysts over the years.
This morning's disintegration of SpaceX's Starship in its major test flight led immediately to an implosion-like move in Dogecoin, which has plunged 8% over the past three hours, as of 12:15 p.m. ET. Prior to this move, the stock had moved steadily higher. Thus, over the past day, this token has declined only 5.8%, which is still a considerable move, even for this volatile meme token.
So what
Today's date, 4/20, made popular by pop culture, is closely correlated with price movements for this meme token. Thus, the initial optimism heading into this SpaceX test flight may have had some bulls in buying mode to start the day.
However, this crypto's stark turnaround on a catalyst most would think shouldn't impact any cryptocurrency (and it really shouldn't) may have raised some eyebrows. There's no question that at least a sizable portion of Dogecoin's investor base are fans of Musk. But should a rocket explosion really cause an implosion in a token tied to one of the world's richest men?
That's a perplexing idea, but the fact that this token rises and falls with the popularity of Musk means that's what investors are in for with this speculative asset.
Now what
My take on today's move is that it's astounding. No fundamental rationale can be put forward for this move in Dogecoin, other than the idea that retail investors are feeling down about the prospects for Musk, and by extension, Dogecoin.
Test flights fail all the time, and SpaceX has failed in the past. However, I have to say that if Dogecoin can move in this fashion on such an unrelated catalyst, it's probably not an investable asset for any investor who takes risk management seriously.
