SAN ANTONIO — An image of a Japanese Shiba Inu dog with a side-eye began as a meme and has now become the face of dogecoin. Two engineers reportedly created dogecoin as a bitcoin parody. Out of the thousands of cryptocurrencies in existence, dogecoin is the fourth most valuable cryptocurrency. According to a cryptocurrency data site CoinMarketCap, it was worth roughly $67 billion by the time KENS 5 aired this story.
“A lot of these cryptocurrencies are simply computer algorithms. People can literally make them and that’s what happened with dogecoin,” explained Karl Eggerss, senior wealth advisor and partner of Covenant. “It started out as a joke and really started taking off when Elon Musk, who of course is the CEO of Tesla, tweeted it.”
A single coin cost around one penny in January, rose to over 7 cents in February, and skyrocketed to nearly $0.75 this past week.
Musk, a huge advocate of cryptocurrencies, has become a major influence on dogecoin. On Saturday, he was featured on the comedy show, Saturday Night Live. He played a financial expert in one of the skits and praised the cryptocurrency but also, called the token a "hustle." The price of dogecoin dropped during his appearance. But Musk remains steadfast in his support for dogecoin. In a recent post, he asked his 54 million followers: “Do you want Tesla to accept doge?" Tesla already accepts bitcoin as a form of payment for its cars.
Another famous business owner who's already accepting dogecoin is Mark Cuban. He owns the NBA’s Dallas Mavericks and allows fans to buy tickets or merchandise using dogecoin.
Despite the digital currency going mainstream, skeptics argue that the value of dogecoin is simply based on what buyers are willing to pay. They say unlike bitcoin, there is an unlimited supply of dogecoin. The lack of scarcity undermines its long-term value.
“A lot of tech companies dominated in the 1990’s that no longer exist anymore. It’ll be the same with some cryptocurrencies,” said Eggerss. “I think ultimately, bitcoin will last longer than dogecoin because of how it started, how it was built and again, the institutional adoption.”
Eggerss believes the biggest challenge with cryptocurrencies will be regulation. Currently, they are not controlled by any government.
“Are they reportable on brokerage statements when you sell them and buy them? They are clearly used for things like money laundering,” said Eggerss. “How do we regulate this? The ironic thing is that’s why some people are buying these because they don’t want it to be regulated. It’s interesting. That battle will continue.”