So I woke up this morning with plans to write a reasonably serious article for Slate.com—something about the Republican Party’s war on “woke” corporations, yadda yadda. But then I started staring into the morass of Twitter, like one does, where every fourth finance guy in my feed seemed to be joking about the latest surge of Dogecoin, the crypto token with the face of a dog. As of now, the world’s most self-consciously stupid digital currency is up more than 6,000 percent since January, and 106 percent for the day. There are now real, live Doge millionaires.
And I said to myself: Why not?
I’m not a crypto guy. Before this afternoon, I had never bought any. Bitcoin and its descendants have always struck me as technological solutions in search of a problem, and now that they’re threatening to become a genuine ecological catastrophe thanks to the sheer amount of electricity devoured by the server farms devoted to mining tokens, I’d say it’s borderline immoral to treat them as a speculative investment. (Literally, it’s sucking up as much power as all of Argentina.)
But it’s been a long pandemic, we all need to feel something, and after watching half the Internet gleefully throw money at our surreal, Reddit-addled markets these past several months, I figured it couldn’t hurt to put down $100 and get in on the fun, just a little.1 Plus, when you stop and think about it, Dogecoin really is the dumb joke that somehow presaged our present moment of meme stonks and weird financial frenzies. It deserves a scintilla of respect. Or if not exactly that, at least some recognition.
After all, we’re talking about a literal meme that was transformed into a tradable asset through nothing but the sheer power of Internet geek enthusiasm. There is no real rationale for Dogecoin. It was supposed to be a one-off gag about internet ephemera. Back in 2013, Bitcoin mania was reaching its first feverish peak, and everyone was sharing doge memes—a picture of a surprised/frightened/skeptical-looking shiba inu with some nongrammatical exclamations in comic sans, like “wow,” “much scared,” and “very snack.” Some joker in Australia tweeted, “Investing in Dogecoin. Pretty sure it’s the next big thing.” Then another guy went ahead and actually built it by tweaking some Bitcoin code, the tokens got big on Reddit because everyone thought the conceit was hilarious and used them to tip each other for funny comments, the value started rising, and suddenly people were donating Dogecoin to help send the real-life Jamaican Bobsled team to the Olympics before scammers flocked to the boomlet and the whole thing, as seemed inevitable, crashed.
I remember thinking back then that Dogecoin had to signal the top of the whole crypto market. At the time, I was writing for the Atlantic, where my colleague Matt O’Brien had carved out a mini-beat battling with Internet gold bugs. Since Bitcoin was, in effect, digital gold, it also became the object of Matt’s ire, and I basically adopted his view. He shared the same basic criticism as lots of economics writers at the time. Like gold, Bitcoin has a deflationary bias—there is a fixed amount that users can ever mine, and its supply is designed to grow slowly over time. That pre-engineered scarcity seemingly encouraged people to hoard it in the expectation that its value would rise rather than use it as an actual currency (Bitcoins’ wild price swings also seemed to make it iffy as an actual medium of exchange). Dogecoin was kind of like Bitcoin, but sillier and less thought-out. Part of the reason it first collapsed was that mining the stuff was actually too easy at the time. And it seemed like any technological movement capable of spawning a bubble so self-evidently idiotic had to be near its denouement.
Anyway, in retrospect I probably should have ignored Matt and opened up a wallet, because while he may have been right about Bitcoin’s longterm uselessness as a currency, it’s currently worth almost $62,000 a pop. It turns out that that a digital token with with an incentive to “hodl” built right into the code made the perfect speculative asset class for new tech wealth. As for dogecoin, it’s gone through occasional booms, busts, and more booms thanks to Tesla founder/crypto enthusiast/chan god Elon Musk, who has half(?)-jokingly called it “the people’s crypto” and likes to tweet memes about it once in a while. Like this:
Or this from Thursday:
Why do Musk’s tweets drive so much buying? I don’t honestly know. I assume it’s because Tesla bought $1.5 billion in Bitcoin and is accepting it for car purchases. Maybe some people sincerely believe he’ll do the same thing with the dog meme tokens and isn’t just having a bit of fun moving markets.
Aside from Musk’s tweeting, the whole crypto market is going nuts at the moment in the aftermath of crypto-trading exchange Coinbase’s debut as a public company. I opened up my own account on Friday, thinking I could snap up for Dogecoin for myself on it, only to discover the coin isn’t available on the platform. (This is apparently a subject of great consternation for Dogecoin’s fans.) I eventually opened up a Robinhood account, which let me buy 281 of the suckers. Maybe I’ll double my money and buy a nice bottle of bourbon with the profit. Or maybe it’ll crash again and I’ll keep the coins around as a little digital pet, a memento of this era. In a few years I’ll look at my brokerage account and think: Wow. Much 2021. So bubble. Good tymes.
1 I know. $100. Yawn. I’m a timid Old Millennial whose formative financial experience was watching the dotcom bubble go bust and who mostly invests in index funds. What else can I say? (Other than don’t take this blog post as investment advice!)