The rise of meme coins. Elon Musk’s tweets spawn hundreds of DOGE clones

On September 28, Elon Musk, the most famous supporter of the Dogecoin cryptocurrency, completed the deal to buy the social network Twitter. The event was followed by a boom in cryptocurrency memes. In just three days, the price of DOGE soared by 133%, while its closest competitor Shiba Inu (SHIB) rose by 30%. Existing “meme coins” followed the leaders, and new DOGE clones already number in the hundreds.

History of Dogecoin’s ups

Dogecoin was created in 2013 by Australian entrepreneur Jackson Palmer and software engineer Billy Markus. The token was conceived as a joke on altcoins that were flooding the market, and its mascot became a Shiba-Inu dog from a popular meme at the time. Dogecoin is based on the Litecoin (LTC) blockchain, which in turn is a fork of bitcoin and uses the Proof-of-Work (PoW) consensus algorithm.

The first major jump in the price of DOGE occurred on May 10, 2017, when the crypto sphere was first swept by a flood of retail investors. Then, in 70 days, the meme token rose ин more than 1890% from $0б00021 to a peak of $0б0042, and its market capitalization soared by nearly $350 million. Shortly after these events, there was a two-week market pullback that collapsed the coin’s rate by 75%.

On January 7, 2018, Dogecoin crossed the $0,02 mark, a 380% increase from its previous high, and its market capitalization reached $1,6 billion. However, over the next seven days, the price of the token fell again by more than 70% to $0,0047.

In April 2018, shortly before another crypto winter hit the market, DOGE saw a brief recovery. In three days, the cryptocurrency rose by 103% from $0,0020 to $0,0041. Over the same month, bitcoin also increased significantly in price, but several times less than DOGE.

Dogecoin’s first major rally from the rest of the crypto market occurred in September 2018, when testing of the bridge between Dogecoin and Ethereum (ETH) networks was completed. Following the news, the price of the token rose by 173%. However, later it turned out that due to the collapse of ETH prices, the developers did not have enough funding to implement the project, and the upgrade was suspended.

At the beginning of January 2021, the weekday of traditional financial markets was disrupted by a merger of amateur traders from a Reddit forum called WallStreetBets (WSB). They began to buy stocks of companies, on the decline of which large hedge funds hoped to make money. On January 28, WSB got to the crypto market, becoming a catalyst for another rise of DOGE. In just two days, the token surged by 1100% to a new all-time high of $0,087. Part of the reason for this surge was the mention of Dogecoin on Twitter by some well-known personalities, including Elon Musk.

Even before buying the social network, Musk repeatedly announced his intention to integrate payments in DOGE into Twitter services. In addition, other companies owned by him, including Tesla, SpaceX, and The Boring Company, have already started to accept the meme cryptocurrency as payment. After a recent tweet from the billionaire with a picture of a Shiba Inu dog wearing a T-shirt with the Twitter logo, the DOGE rate rose by 16,7% in just a few hours.

As of November 1, the coin is trading at $0,14, according to the Binance exchange. Notably, in September, after the Ethereum network switched to the Proof-of-Stake (PoS) algorithm, DOGE became the second most capitalized cryptocurrency among existing coins running on the PoW algorithm.

Copycat coins

On the wave of DOGE’s success, its imitators began to appear. Thus, in 2020, a group of anonymous developers calling themselves Ryoshi created the cryptocurrency Shiba Inu (SHIB). The only feature of the token on the Ethereum blockchain was its decentralization and development through community decisions. For a long time, it was thought that the coin was created only to be abandoned after artificially inflating the price (a Pump-and-Dump scheme) and quick earnings of the team.

However, after a while, the developers of the project began to create an infrastructure. A decentralized exchange ShibaSwap, a mechanism for burning SHIB, and a collection of non-fungible tokens (NFTs) were launched. In addition, in July, the developers announced the launch of SHI, an algorithmic stablecoin. Two more tokens from the creators of SHIB appeared: Doge Killer (LEASH) and Bone (BONE).

Judging by the entries on blogs and social networks, the Shiba Inu team believes that their coin can surpass DOGE in price, but it has not happened yet. From January to October 2021, SHIB gained 27 000 000% to its all-time high of $0,00007924. After that, however, the coin’s price went into decline, showing short-term minor spikes. At the time of publication, the meme token is trading at $0,00001285, having gained 28,81% over the week, and has a market capitalization of $7,59 billion.

There are over 300 coins on the CoinMarketCap list of meme coins, and many of them are also growing amid the news flow around Elon Musk and DOGE. Floki Inu (FLOKI) was created by members of the SHIB community. The token was named after Musk’s pet, a dog named Floki. Within the last seven days, the asset grew by 71,2% to $0,00001173. At the same time, FLOKI reached its all-time high in November 2021 at $0,000309 and then went into decline.

The token of MuskSwap (MUSK), a decentralized platform, appeared as a joke for Tesla CEO fans. Within a week, the coin rose by 38,6%. Many other coins also refer to Elon Musk, dogs, and other memes from the Internet. For example, Dogelon Mars (ELON), rose by 85% in a week, or Baby Doge Coin (BABYDOGE), which gained 18,6% in the same period.

Since the news of Twitter’s purchase and the rumors of crypto integration into the social network, experts at PeckShield detected 169 new tokens on Ethereum and BNB Chain blockchains whose names somehow play around with the word “DOGE.” The price of most of them already plummeted to their lowest levels after a brief spike. According to analysts, 42 copycat coins turned out to be blatantly fraudulent projects created to steal user funds.

Shortly before that, PeckShield warned about the influx of scam tokens that use Elon Musk’s identity to promote them. The names of such coins often mention Twitter or the billionaire himself, such as Twitter Coin and Twitter Inu.

Musk did not comment on the appearance of hundreds of clone coins or tokens named after him, as well as the likely losses of those who were caught manipulating their price or fell victim to fraudsters. However, there have been earlier implications of his tweets about Dogecoin.

In June, an investor who lost money trading DOGE filed a $258 billion lawsuit against SpaceX and Tesla, accusing the CEO of the companies of a scheme to manipulate the cryptocurrency’s price. Previously, one of the creators of Dogecoin, Jason Palmer, openly called Musk “a grifter” who sells promises.

The accusations did not affect Tesla’s CEO. Musk openly said that he does not sell his DOGE coins and that he will continue to support Dogecoin.

I will keep supporting Dogecoin — Elon Musk (@elonmusk) June" class="redactor-linkify-object">https://twitter.com/elonmusk/status/15384060403745... 19, 2022