The capital markets have endured quite a bit of turbulence during the past couple of months. Through the market close on April 4, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have declined by 10%, 14%, and 19%, respectively, so far this year. The primary culprits are rooted in emotional reactions to new tariff policies and how they could affect the broader macroeconomy.
Generally speaking, when investors flee the stock market they may begin to look at alternative investments such as commodities (like gold) or even cryptocurrency. For the past several months, one cryptocurrency that has increasingly landed on investor radars in Dogecoin (DOGE +1.74%).
Let's explore what's been driving the newfound interest in Dogecoin in the first place, and what some recent commentary from Tesla Chief Executive Officer Elon Musk says about whether now is a good time to invest in the popular cryptocurrency.
What sparked the interest in Dogecoin during the past few months?
The chart below illustrates Dogecoin's price changes during the past year. Between January and October 2024, the price of Dogecoin meandered lower. However, a surge started in November, and Dogecoin's price rose nearly fivefold by December.
Dogecoin Price data by YCharts
Dogecoin's price increase late last year coincided with the presidential re-election of Donald Trump. Now, you may be wondering why Trump's return to the White House sparked an abnormally intense optimism about Dogecoin. After all, what does one thing have to do with the other?
While campaigning, Trump consistently said that he was concerned about the federal budget and rising U.S. debt levels. These talking points resonated with Musk, so much so that the serial entrepreneur emerged as a leading Trump surrogate and began spending quite a bit of time with the GOP nominee. In the final stages of the campaign, Musk and Trump began promoting the idea of creating a new program that would be focused on identifying wasteful federal spending.
The name of this initiative? The Department of Government Efficiency, or DOGE.
Indeed, Trump emerged victorious on Nov. 5 and subsequently the price of Dogecoin went to the moon for a brief period. Below, I'll dig deeper into what fueled the excitement around Dogecoin and explore why I think its ongoing sell-off will continue.
Image source: Getty Images.
Musk just turned down the music
As is the case with many meme coins, Dogecoin's rising price isn't actually rooted in anything concrete about the cryptocurrency itself. Rather, online pumpers created a hype narrative that Musk's leadership at DOGE may somehow lead to something positive for Dogecoin. While this idea may seem completely farfetched, it actually (sort of) had some merit. Bear in mind that Musk himself has vocally expressed interest in Dogecoin in the past -- but has always done so in jest.
As the chart in the prior section clearly shows, the price of Dogecoin has been declining throughout 2025. To me, this signals that enthusiasm around the cryptocurrency is waning. And in the video below, some choice words by Musk have me thinking Dogecoin's best days are very much in the rearview mirror.
🚨 ELON MUSK: "There are no plans for the government to use dogecoin or anything.
-- DogeDesigner (@cb_doge) March 31, 2025
I was going to call it Government Efficiency Commission but that's a super boring name. Then the internet said it needs to be Department of Government Efficiency. I was like Internet is right." pic.twitter.com/5BLBQeN7dL
During this recent town hall speech, Musk explained how the actual name for DOGE came to be. He said he did not come up with the name himself and only agreed to it once he realized the comical irony that the acronym DOGE matches the ticker symbol for Dogecoin.
Most importantly, he went on to say that the U.S. government has "no plans" to use Dogecoin. While he did quickly follow that comment up with "as far as I know," I saw that as a rare instance in which Musk exhibited some caution. Althoiugh the Trump administration has shown enthusiasm for the crypto industry, much of the supportive rhetoric and actions have been around Bitcoin, XRP, and other cryptocurrencies that have actual utility.
Is Dogecoin a good investment right now?
Given Dogecoin's volatile price, some investors lucked out and managed to make some money before it started tumbling. But luck isn't a sound basis for investing.
CRYPTO: DOGE
Key Data Points
At the end of the day, Dogecoin is not a prudent option for long-term investors looking to build wealth. Rather, it is a highly volatile asset in a sector that is still quite speculative.
I do not see Dogecoin as a good investment, and I think Musk's commentary from the video provides some much-needed clarity.
