The Crypto Space Race between Elon Musk and Bitmex Has Begun

Since Elon Musk began promoting the cryptocurrency on his favorite social media platform, Twitter, it has become clear that he would have to choose between bitcoin and dogecoin, a difficult decision based on market volatility. But he had to do it sooner or later.

Why did Elon choose DOGE?

What motivated Elon to choose Dogecoin, a newcomer in the crypto craze, over well-established tokens like Bitcoin? We should all be aware by now that the cryptocurrency market is extremely volatile, with anything happening in a matter of seconds. This trend has both positive and negative consequences. However, none other than TESLA CEO and businessman Elon Musk has validated this claim. His random tweets on Twitter have had unanticipated effects on the markets, and analysts are still surprised at how quickly it all happened.

Musk is known for being outspoken, so it was no surprise that he would use this characteristic in the volatile cryptocurrency market. When Tesla CEO Elon Musk entered the world of cryptocurrencies, he began expressing his own views on where the market was heading. Because he was interested in Bitcoin at the time and was rumored to own a significant number of Bitcoin, it was inevitable that his views, which he shared with the public, would cause fluctuations, which they did!

While Musk's tweets were not necessarily posted for financial gain, they have had a significant impact on cryptocurrency investors. They also raise concerns about the stability of a market that is so easily swayed, especially as retail investors increasingly flock to cryptocurrencies.

Coinbase, a cryptocurrency exchange platform, became the first major cryptocurrency company to go public in the United States in April, signaling the mainstreaming of blockchain-based currencies such as Bitcoin, Ethereum, and Dogecoin. Musk's cryptocurrency tweets in recent weeks have had a significant impact on Bitcoin. Musk announced in May that Tesla would no longer accept bitcoin as payment due to environmental concerns about its high energy consumption, reversing its acceptance of the marquee cryptocurrency just two months before.

As a result, the price of Bitcoin dropped around 15,000 USD. Bitcoin was labeled as the currency of the future, but with time, the title is slowly slipping out of reach, and it's not surprising that with Elon Musk's breakup tweet, the currency is destined for difficulties in the coming months. unless it is resuscitated.

Elon Musk and other investors have begun to associate Dogecoin with the term "people's currency," which may be a factor in his decision to abandon bitcoin in favor of DOGE. Being a meme-propelled token has also aided it in gaining good coverage on global social media, as social platforms are an important component in allowing communication between a large group of people. And currencies like DOGE benefit greatly from this.

Social media allows DOGE memes to spread quickly, and when people choose to mock or discuss it, the currency receives free publicity, influencing more users to invest Dogecoin is better than bitcoin. Furthermore, because Dogecoin has lower fees, faster transaction speeds, higher price stability, and mining is profitable and incentivizes, Chinese miners do not control the network. It is possible to say that Dogecoin has a mechanism to counteract the effect of lost coins. The shit coin originally had a hard limit of 100 billion tokens, similar to Bitcoin's cap of 21 million tokens. However, in 2014, the developers changed their plans, removing the supply constraints. According to fool.com, as long as miners continue to build the blockchain, more Dogecoin will wink into existence.

The miner receives a fixed reward of 10,000 dogecoin tokens each time a block is verified. This will continue indefinitely unless the code is rewritten. When demand is held constant, the price of an asset falls as supply increases. This is a critical flaw in economics. If an asset's supply expands to infinity, the price should theoretically fall to zero, unless the code is rewritten to introduce scarcity.

That is, without a doubt, where the price of dogecoin is headed. It may not happen this year or even this decade, but excess supply will eventually overwhelm demand. Elon Musk has stated that he will buy out major Dogecoin holders in order to keep the fringe cryptocurrency as the internet's currency. Musk, the CEO of SpaceX and Tesla, has issued several tweets criticizing so-called crypto whales who have large stockpiles of Dogecoin. According to Mr Musk, the only thing preventing Dogecoin from becoming a mainstream currency is the presence of large holders, who has previously suggested that the people's cryptocurrency could become the official currency on Mars.

Conclusion

Finally, Elon had the following to say:

“I will fully support it if major Dogecoin holders sell the majority of their coins.” In my opinion, the only real issue is too much concentration, he tweeted. According to digital wallet analysis, one holder owns more than a quarter of the total 128 billion dogecoin tokens in circulation. At today's prices, the balance of over 36 billion DOGE is worth more than 2 billion dollars. Another 19 digital wallets hold 25 billion Dogecoin, implying that only 20 people own more than half of all Dogecoin in circulation. Assuming the wallets are owned by different people.

Question of the Day

Do you agree with Elon Musk that Dogecoin hoarders are the primary issue the coin is facing?