Market Wrap Year-End Review: Musk Pumps Bitcoin and Dogecoin

Market Wrap Year-End Review: Musk Pumps Bitcoin and Dogecoin

Hello, Market Wrap readers! During the final two weeks of 2021 we’re using this space to recap the year’s most dramatic moments in cryptocurrency markets – and highlight key lessons from this fast-evolving corner of global finance. Over a series of eight posts starting on Dec. 20 and running through Dec. 30, we’re recapping what shook crypto markets this year. (For the latest crypto prices and news headlines, please scroll down.)

Meme Stock GameStop Now Accepts Meme Cryptos Like Doge

In a year which began with memes helping to propel GameStop’s junk stock price into the stratosphere, it’s only fitting that the shrinking video game retailer should cap the frivolities off by cozying up to cryptocurrencies. Last week, GameStop apparently joined Flexa, a payment network that lets you pay for real-world stuff with blockchain assets, including the meme currency Dogecoin.

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“Enter the metaverse,” Flexa wrote on December 16 in an announcement that had nothing to do with the “metaverse.” “GameStop is now on Flexa, and we’re celebrating by enabling support for four new metaverse assets: Axie Infinity Shard, MANA, SAND, and Smooth Love Potion are now accepted anywhere on the Flexa network.”

Flexa is an app that connects stores and restaurants with crypto-enthusiasts so that the latter can spend their Bitcoin and other environment-destroying currencies for goods and services in the real world. One of those stores now appears to be GameStop, which will apparently let you pre-order games like Pokémon Legends: Arceus using Smooth Love Potions which are currently worth $0.03071 each.

GameStop did not immediately respond to a request for comment.

Cryptocurrencies have been breeding like rabbits this year, but few have become as popular, or showcased the absurdity of the entire enterprise so well, as Dogecoin. A joke inspired by the decade-old Doge meme and hatched by two software engineers back in 2013, the meme-crypto shot up to $0.71 earlier this year thanks to Elon Musk’s tweets. Despite plummeting in the months since, the value still bounces around wildly, and one of its creators is on the record calling cryptocurrency a “right-wing, hyper-capitalist” scam.

Unlike Dogecoin, GameStop’s stock has, despite some recent bumps, continued to coast at a once unthinkable $150 a share. Of course, that hasn’t actually translated into better working conditions at the company, where employees are at the breaking point thanks in part to understaffing and terrible pay. It’s unclear how the new crypto collaboration will help them, but GameStop customers at least can now rest easy knowing it’s easier than ever to liquidate their Dogecoin holdings by pouring it all into Funko Pops.

Musk Explains Why Dogecoin Is a Better Payment Method Than Bitcoin in TIME Interview

On Dec. 13, TIME magazine named CEO of Tesla/SpaceX – Elon Musk – as its 2021 Person of the Year. During a recorded interview with Musk that TIME posted to its Twitter channel as part of its Person of the Year announcement, the world’s richest person explained why he believes Dogecoin is better than Bitcoin in some regards.

Three functions of money – whether digital or fiat

Before we examine the self-proclaimed “DogeFather’s” fixation with meme tokens, we should first examine what money does. For fiat money and cryptocurrencies to be useful to us, there are three primary functions that cold hard cash or hot digital funds need to be able to address. It’s generally accepted that currencies address the following three functions:

Unit of account: A comparative measuring stick for different goods or services. Medium of exchange: An accepted method of payment for settling debts or acquiring goods. Store of value: Inherent ability of a given asset to maintain its payment power in the short and long term.

With that as context, Elon Musk – who also co-founded PayPal – believes that Dogecoin is better than Bitcoin in at least one of those baseline currency criteria as shared in these transcribed quotes from the Person of the Year interview.

Musk’s differentiator for Dogecoin over Bitcoin

“My understanding of the money system, at a fundamental level of how it actually works – the detailed mechanics of it – I think there are very few people who understand it better than me. Bitcoin is an interesting example and the prime mover on this [the crypto space], but the transaction volume of Bitcoin is low and the cost per transaction is high. It is at its base level suitable as a store of value. But fundamentally Bitcoin is not a good substitute for transactional currency.”

However, Musk believes that Dogecoin is ideally suited to be a widely used method of exchange.

“Even though it was created as a silly joke, Dogecoin is better suited for transactions. The total transaction flow – transactions per day – that you can do with Dogecoin has much higher potential than Bitcoin. It [Dogecoin] is slightly inflationary, but that inflationary number is a fixed number as opposed to a percentage. Which means that over time, its percentage of inflation decreases. That’s actually good because it encourages people to spend it rather than hoard [Dogecoin] as a store of value.”

Musk’s love-hate relationship with Bitcoin in 2021

The Tesla organization holds the second largest number of Bitcoin by a corporation, which is reportedly 38,300 coins. Earlier this year Musk also flip flopped back and forth as to whether Tesla would accept Bitcoin as payment for Tesla e-vehicles. His initial rejection of Bitcoin payments sparked a 50% decline in that crypto. Ironically, his own mercurial social media actions have both hurt and helped Tesla’s Bitcoin holdings this year. Perhaps someone should tell the combo-world’s richest person and Person of the Year that silence is sometimes golden.

Dogecoin Co-Creator Blasts $DOGE Community In-Fighting

Recently, Billy Markus, co-creator of the popular meme-inspired cryptocurrency Dogecoin, went after members of the $DOGE community that have been attempting to “ruin” the community from the inside.

Dogecoin was initially released on 6 December 2013, as a “fun and friendly internet currency.” It was created by Billy Markus and Jackson Palmer. It is “a decentralized, peer-to-peer digital currency” that has as its mascot “Doge”, a Shiba Inu (a Japanese breed of dog).

Since then, its popularity has substantially increased, especially this year, mostly thanks to support by billionaires Elon Musk (the CEO of Tesla and SpaceX) and Mark Cuban, to the point that it is currently the 12th most valuable cryptocurrency, with a market cap of over $25.37 billion.

In a tweet published on Tuesday (December 21), Markus vented his frustration with the behavior of a subset of the $DOGE community, saying their actions contributed to “counterproductive tendencies.”

Although Markus believes the majority of $DOGE are great, he lamented the behavior of those people who had managed to make their voices heard loudest amongst the community.

Markus’s tweet was in response to a meme published by Twitter user “Jimjimmiejames” who outlined the multitude of “#dogecoin battles,” and questioned whether it was even worth participating in the community.

how to ruin a community from the inside

keep this in mind, #dogecoin community members – lots of you are great, but lots of counterproductive tendencies among quite a few loud types 👍 https://t.co/8esnPBkXf8 — Shibetoshi Nakamoto (@BillyM2k) December 21, 2021

While Dogecoin has been slammed for a lack of real developments despite its meteoric price increase over the past year, Markus has been an active member in the crypto space and in late September he gave a list of ideas for how to improve $DOGE.

Two things I believe would help Dogecoin:

1. Completion of DOGE-ETH bridge

2. NFT platforms (e.g. Opensea) allowing for the DOGE-ETH token to be used for purchases

NFTs purchasing is high demand with crypto. Allowing for DOGE purchases of NFTs greatly increases its utility. — Shibetoshi Nakamoto (@BillyM2k) September 29, 2021

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

Image Credit

Photo by user KNFind via Pixabay.com

Dogecoin price won’t be out of trouble until DOGE breaches $0.21

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