Originally launched as a parody of crypto speculation, Dogecoin has since become the kind of speculative asset it was meant to mock — largely due to Elon Musk’s influence. His social media activity and public endorsements have played a central and ongoing role in shaping DOGE’s trajectory.
BeInCrypto spoke with Erwin Voloder, Head of Policy of the European Blockchain Association, to discuss how Musk blurred the lines between parody and promotion, leading people to assign real-world value to a meme and generating ethical concerns along the way.
The Genesis of Dogecoin
Toward the end of 2013, software engineers Billy Markus and Jackson Palmer joined forces to create Dogecoin, the first meme coin in crypto history. Its primary purpose was to serve as a lighthearted parody of the chaotic crypto hype.
Born from the “Doge” internet meme, which prominently featured a Shiba Inu, the meme coin was intended as a humorous jab at the often illogical nature of crypto speculation.
Despite its satirical origins, Dogecoin quickly gained a dedicated online following—so much so that even Tesla CEO Elon Musk became drawn to it.
Today, he’s considered a key figure in the community, and Dogecoin, contrary to its initial philosophy, has become a speculative asset.
“Musk’s involvement transformed Dogecoin from a satirical internet token into a speculative asset class by bestowing it with perceived legitimacy and entertainment value. His tweets and appearances turned Dogecoin into a cultural product rather than a financial one—a kind of performance art with real economic consequences. The irony is that a coin created to mock irrational investing became the poster child of irrational investing,” Voloder told BeInCrypto.
In addition to symbolic endorsements, Musk has exerted concrete influence. A prime example is Tesla’s early 2022 decision to accept Dogecoin for select merchandise, significantly strengthening its position and indicating its practical potential.
Musk also didn’t hesitate to use social media to convey his love for Dogecoin.
How Did Musk’s Tweets Impact Dogecoin’s Market?
Throughout the years, Elon Musk, a prolific Twitter user even before he bought the platform, has shared numerous posts referencing Dogecoin. Each of these tweets has substantially impacted the meme coin’s visibility and price performance.
When Musk referred to Dogecoin in an April 2019 tweet as his favorite cryptocurrency, the market went berserk. In two days, the coin’s price went from $0.002 on April 1 to as high as $0.004.
Two years later, Musk’s X posts declaring “Dogecoin is the people’s crypto” triggered an overnight trading volume surge of over 50%.
Soon enough, retail investors started to follow Musk’s endorsements mindlessly. But it wasn’t all butterflies and roses. Musks’s unpredictable pronouncements also came with extreme volatility.
“Musk blurred the line between parody and promotion, which led people to assign real-world value to a meme. Without him, it may have remained a niche internet joke but with him, it became a symbol of speculative absurdity,” Voloder said.
When Musk called Dogecoin ‘a hustle’ on Saturday Night Live in May 2021, the coin lost more than a third of its price in a few hours.
“Dogecoin has no clear roadmap, no underlying yield or utility, and limited development activity, meaning its valuation is especially sentiment-driven. In such an environment, a single individual’s actions can drive or destroy market perception, particularly when that individual is one of the world’s most followed and wealthiest people,” he added.
Then, in January 2025, President Trump appointed Musk as the head of a newly created agency tasked with cutting federal spending.
Musk called it the Department of Government Efficiency, or D.O.G.E. for short. The name was intentional, and the internet broke accordingly.
D.O.G.E. and the Price Plunge: What’s the Correlation?
President Trump launched the D.O.G.E. department by executive order on his first day on the job. After D.O.G.E. launched its official government website, Dogecoin’s price surged by 13% in 15 minutes, breaking its previous short-term downtrend.
Yet, since the official establishment of the Department of Government Efficiency, DOGE’s price has been freefalling. While valued at $0.36 on January 20, its price has since fallen to $0.15 today.
Findings from a recent Finbold report have also revealed that Musk might now be having the opposite effect on Dogecoin’s value and sentiment.
According to the data, the number of Dogecoin millionaire addresses has plunged by over 41% between January 21 and March 31. In just over two months, the cryptocurrency has decreased by 964 addresses.
Notably, the report indicated a massive proportional decline in the number of the wealthiest Dogecoin addresses. The count of addresses holding $1 million to $9.99 million decreased by 40.21% in Q1 2025.
Even more significantly, the number of addresses holding over $10 million plummeted by 47%, from 400 to 212.
In short, Dogecoin whales are dumping the token.
“Musk’s influence remains a key variable in Dogecoin’s valuation, and the timing of the drop in high-value addresses closely aligns with his D.O.G.E. announcement, suggesting a correlation. However, attributing the entire reversal to Musk overlooks broader macro factors like rising interest rates, tighter crypto regulation, and waning retail enthusiasm post-2021,” Voloder explained.
Despite the difficulty of assessing the precise impact of Elon Musk’s D.O.G.E. leadership on Dogecoin’s performance, his significant influence on the cryptocurrency has become evident.
The ethical considerations accompanying Musk’s influence have also become difficult to ignore.
The Ethical Concerns of a Billionaire’s Influence
According to Voloder, the Dogecoin case illustrates the perils of parasocial investing, a behavior in which people mistakenly assign credibility to famous personalities based on their celebrity status or charisma.
It further shows the damaging effects of uncritical reliance on endorsements, potentially leading to substantial financial losses for retail investors.
The ethics of a billionaire influencing a volatile market like cryptocurrency also present significant complexities.
“On one hand, Musk has the right to express personal views and participate in public discourse, including around assets like Dogecoin. On the other, his outsized influence means that his commentary can trigger real financial harm or euphoria in retail investors who often lack access to sophisticated risk models. Ethically, when you wield that kind of influence, there’s a strong argument for assuming a higher standard of responsibility—especially in a market with minimal guardrails,” Voloder told BeInCrypto.
Given the unregulated nature of the cryptocurrency industry, it’s currently challenging to pinpoint the degree to which Musk’s actions can be held responsible.
Does Musk’s Influence Constitute Market Manipulation?
Although presented as personal opinions, Musk’s tweets demonstrably affect Dogecoin’s price, creating a legal gray area regarding potential market manipulation under US securities and commodities laws.
“Under SEC rules, market manipulation involves intentional conduct designed to deceive or defraud investors by controlling or artificially affecting market prices. While Dogecoin is not officially deemed a security, and thus outside the SEC’s traditional remit, the CFTC could still scrutinize it under its anti-manipulation powers for commodities,” Voloder explained.
The Dogecoin case isn’t the first time a high-profile figure has influenced markets in ways that were manipulative, though not explicitly illegal.
Voloder highlighted two instances at different points in the 20th century: when prominent banker JP Morgan steered markets during the panic of 1907 and investor George Soros broke the Bank of England in 1992.
Though their maneuvers were technically legal, they managed to sway market outcomes. However, this was the 20th century, and their impact was proportionally much smaller.
“The difference today is that social media provides instantaneous reach to millions of investors, amplifying the potential impact. So even if Musk’s tweets are framed as personal musings, their predictable effect on price can be seen as a form of market signaling—intentional or not,” Voloder told BeInCrypto.
In fact, the SEC and legal experts are already debating Elon Musk’s potential influence on Dogecoin’s financial market activities.
A $258 Billion Lawsuit
Elon Musk currently faces a $258 billion class action lawsuit for running a Dogecoin pyramid scheme.
The lawsuit, filed in June 2022, claims that Musk intentionally promoted Dogecoin through his tweets, public appearances, and media interactions, creating hype and driving up demand.
According to the plaintiffs, this artificial inflation of Dogecoin’s price allowed Musk and his companies to profit while leaving other investors with substantial losses when the price inevitably declined.
Due to the SEC’s unclear legal classification of cryptocurrencies like Dogecoin, Voloder anticipates a difficult path for these claims in court. Nevertheless, the lawsuit indicates increased attention to market manipulation by influential figures.
“Still, the lawsuit signals increased legal pressure to define where promotional enthusiasm ends and financial misconduct begins. If regulators or courts decide Musk knowingly manipulated the market or misled investors, he could face civil penalties or be forced into settlements. The SEC’s earlier scrutiny of Musk’s Tesla tweets, resulting in a consent decree, shows that regulators are willing to act when market-moving speech crosses certain lines,” Voloder explained.
Musk’s influence on Dogecoin continues unabated, and the long-term effects on the Dogecoin community remain a subject of debate.
Will Dogecoin’s Community Resilience Endure?
The rapid 40% decrease in Dogecoin whale addresses within two months has raised questions about the meme coin’s future strength and resilience.
However, DOGE’s fundamental strength still remains intact – it’s community.
“While the initial hype has faded, Dogecoin still retains a loyal base of enthusiasts, many of whom appreciate its meme-driven culture, low transaction fees, and iconic branding. But the big speculative crowd that initially drove its [all-time high] has largely left the field in absence of sustained bullish narratives or meaningful tech upgrades,” Voloder concluded.
In the future, traders will be watching to see if Dogecoin’s ‘cult following’ eventually dwindles or if a strong community will sustain the ‘OG meme coin’.
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