The price of DOGE skyrocketed this week after the billionaire Tesla founder referred to himself as “The Dogefather”. It rose from $0.25 (£0.18) to $0.30 (£0.22) in less than 15 minutes on Wednesday morning and now it is sitting at $0.31 (£0.22) – pushing towards the record highs it experienced earlier this month. Previous mentions of the “meme cryptocurrency” by Mr Musk have caused similar price spikes, and Prof Alexander, from the University of Sussex Business School, believes he gets “a kick” from it.
She said: “It is difficult to know what Musk is up to with his Dogecoin tweets.
“I suspect he’s having a joke with his friends, flexing his power muscles.
“He appears to get a kick about the control he has over financial markets.
“He is, of course, entitled to do this, I don’t see it as irresponsible because Dogecoin is still such small fry.
“If he tried to do the same with Bitcoin, the larger investor community would not tolerate it.”
Despite this, the academic is not as optimistic as the technology mogul about the future of the coin.
She added: “Musk is wrong to think that Dogecoin is the currency of the Internet. It cannot be that in any real sense.
“Ethereum and other platform coins like Dot, Iota and Cardano are the currency of the Internet.
“Just as the US dollar is the unit of trade in traditional markets, Bitcoin has become the unit of account in crypto markets.
“There are two reasons why – first, Bitcoin is accepted as payment by many large companies and those operating on the dark web, and it is held in vast quantities by huge mining-pool conglomerates.
“Dogecoin does not have the potential to take either of these roles.”
The expert then painted a picture for the future of Dogecoin, stating that it should go back to its roots.
She stated: “I think Dogecoin might continue a very bumpy rise in price and during this time I really hope it recovers its origins.
“Dogecoin’s founders set it up as a joke and used the money they gained for benevolent reasons like funding $25,000 (£17,978) for the Canadian bobsleigh team to compete in the Olympics and $50,000 (£35,957) for a water project in Nigeria.
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“But since Musk took the leading role for Dogecoin in 2017, he has seen it just as a game.
“If he wants Dogecoin to have any fundamental economic value, he needs to direct it back towards its benevolent grassroots.”
Britain’s Financial Conduct Authority (FCA) has previously warned investors of the risks that come with investing in cryptocurrency.
They said: “If consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own cryptocurrency.