Sentiment surrounding cryptocurrencies has soured over the last two years. The total value of all tokens across the industry hit an all-time high of $2.8 trillion in 2021, but that figure now sits 60% lower at just $1.1 trillion.
Why wouldn't it? Some of the industry's most coveted and trusted exchanges and projects have collapsed in spectacular fashion. Regulators are still trying to track down billions of dollars in missing customer funds from the bankrupt FTX exchange, which was one of the largest failures to date.
Tesla CEO Elon Musk has broadly supported crypto technology, though he has definitely been most vocal about speculative token Dogecoin (CRYPTO:DOGE), which dons a Shiba Inu dog as its mascot. That hasn't necessarily changed, but he made a virtual appearance at The Wall Street Journal's CEO council in London on May 23 and adopted a more cautious tone overall.
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Elon Musk and Dogecoin have a wild history
It's fair to say Musk has been one of Dogecoin's greatest supporters. He first used Twitter to convey his enthusiasm for the token in 2019, but that commentary ramped up throughout 2020 and 2021, when he often suggested Dogecoin could play a key role in the global financial system. Sometimes he'd use humorous memes to make that point, so whether he was ever serious is a mystery.
There was also an obvious problem: Few businesses wanted to accept Dogecoin as payment for goods and services. Even today, just 2,158 merchants around the world are willing to transact with the token. Not many people believed the cryptocurrency was ever anything more than a vehicle for speculation.
The Musk-Dogecoin saga reached a crescendo in May 2021 when he hosted the television show Saturday Night Live, where punters widely expected he'd deliver some sort of groundbreaking news that would drive Dogecoin's price to the moon. As it turns out, he didn't, and that event marked the peak -- Dogecoin hit an all-time high of $0.74 per token, and it has since crashed by 90% to trade at just $0.07 today.
To Musk's credit, he has continued to back up his support with concrete action. In early 2022, Tesla started accepting Dogecoin as payment in its online store for merchandise products. Later that year, he launched a fragrance called Burnt Hair, which consumers could also buy using Dogecoin.
Unfortunately, none of those initiatives have boosted the token's languishing price.
Now Musk is advising caution
At the CEO council earlier this week, Musk mildly reiterated his enthusiasm for Dogecoin. He said it's still his favorite cryptocurrency because it has "the best humor" and because of its canine mascot.
However, he said he wasn't advising anyone to buy cryptocurrencies at all, and certainly not to "bet the farm" on Dogecoin. He followed by saying, "Maybe you should, but let me advise you that would be unwise."
He's almost certainly right. There aren't many catalysts that will boost Dogecoin from here. While Bitcoin, the world's largest cryptocurrency, has delivered a return of nearly 60% in 2023 so far, Dogecoin is completely flat year to date. Not even improved investor sentiment surrounding the crypto industry is enough to ignite the meme token.
Plus, Musk has much bigger things on his plate. After acquiring social media platform Twitter for $44 billion last year, he's been fighting to keep it afloat, saying recently it was just a few months away from bankruptcy. Not to mention that Tesla continues to dominate the electric vehicle industry and is racing to release its artificial intelligence-powered robotaxi.
Musk works on those projects when he isn't busy trying to launch his SpaceX Starship into orbit, of course.
All in all, Dogecoin is unlikely to find itself at the top of Musk's priority list anytime soon, and it's unlikely the token will find the legs to run higher organically.
