Elon Musk’s Favorite Cryptocurrency is a Complete Dumpster Fire
Ah, Elon Musk…love him or hate him, good luck avoiding him.
As one of the richest men on earth, the CEO of Tesla, and the new owner of Twitter, he’s one of the most influential men on the planet-for better or worse.
And with that power comes great irresponsibility. Like spending $40 billion on a $20 billion company, for example. Or digging a two-car tunnel under Los Angeles to solve its traffic problem. Two cars at a time.
But his latest gimmick is my least favorite of all the moves in Elon’s playbook: giving attention to Dogecoin (DOGE) and triggering a price surge, just because he can.
That’s what happened yesterday when Elon swapped out the Twitter logo for the DOGE mascot. In an attempt to troll the people suing him for manipulating DOGE’s price, Musk decided to once again…manipulate DOGE’s price.
After DOGE showed up on Twitter, its price surged 25% in 24H. This guy is just begging for another lawsuit.
The worst part is that he thinks he’s being democratic. He thinks he’s promoting the coin of the people. But what he’s doing is just screwing them over.
I know this because of all the cryptocurrencies that Elon could promote, Dogecoin is the most useless, invaluable, dumpster-fire dummy coin of them all. Encouraging people to buy DOGE is like encouraging someone to buy Twitter for double its valuation: a complete waste of money.
Today, I’m going to show you exactly how useless Dogecoin is by running a 5Ts Test.
The 5Ts Test is my proprietary criteria for evaluating a cryptocurrency’s use, utility, and potential for widespread adoption: the three things every quality digital asset needs to be profitable long-term.
Spoiler alert: DOGE does not pass the test. Here’s why…
I’m going to run a brief 5Ts Test on Dogecoin to demonstrate why it’s got no business being in your digital asset portfolio.
The five “Ts” are Team, Technology, Timing, Tokenomics, and “Why token?”
Today I’ll show you the results of my 5Ts Test for DOGE, and you’ll see for yourself why it doesn’t meet the mark.
5Ts Test: Evaluating the Opportunity in Dogecoin (DOGE)
In this category, we will assess the team behind DOGE and evaluate their qualifications to operate a blockchain.
Dogecoin (DOGE) was created in 2013 by programmers Billy Markus and Jackson Palmer. The creators developed Dogecoin as a joke-literally. It was meant to be a satirical alternative to Bitcoin (BTC) playing on the volatile nature of the 2013 cryptocurrency market.
Today, DOGE is run by the Dogecoin Foundation whose Advisory Board includes Jared Birchall, a representative for Elon Musk, aka “The Dogefather.”
That’s as far as we need to go with DOGE’s team. Its founders are embarrassed by it, and Elon Musk loves it. Those are two massive red flags that I’m not willing to look past.
In this category, we will assess the technology behind Dogecoin or the lack thereof.
Dogecoin runs as an independent chain via Litecoin (LTC) fork. As far as new technology, it brings nothing to the table as it runs on the same proof-of-work mechanism as Bitcoin (BTC).
It’s hard to evaluate the technology behind DOGE when there is so little that differentiates it from anything else. It’s technologically identical to Litecoin, which is based on BTC, and uses the same consensus mechanism in plenty of other assets.
Nothing to see here except a regurgitation of other projects.
In this category, we will assess the timing of Dogecoin’s rise to prominence and price history.
DOGE was created in 2013 as a satirical alternative to Bitcoin and was meant to make fun of the wildly speculative nature of the market.
The first eight years of Dogecoin were wildly uneventful. But eventually, the joke landed amid the Reddit meme stock pump-and-dump of 2021 and early investors made a 600,000% profit after Elon Musk tweeted his love for the asset, sending its price to $0.30 per coin.
If you weren’t in DOGE before then, you missed your shot…and that’s a good thing. The asset hasn’t broken $0.10 since then and its biggest rallies are more Elon-related antics.
I don’t know about you, but I don’t want my money on an asset whose price can change overnight thanks to one rich guy.
In this category, we will assess the tokenomics of Dogecoin. This involves the number of tokens circulating, who owns the most, and whether or not there is a cap on the total supply.
There are currently more than 138 billion DOGE tokens in supply with an unlimited cap on production. New tokens are continuously released into the market.
Let’s compare this to currency: if the U.S. dollar had an unlimited supply, where money was printed continuously and released into the market daily, how long would that dollar stay viable?
Not long. The same goes for DOGE. We can deduct from DOGE’s reason for creation, lack of new technology, and reputation as a meme coin that this asset’s only utility is as a currency between crypto investors. Its tokenomics illustrate why it has no value anywhere else.
In this category, we answer the question “Why token,” meaning, is there a need for this to exist as a cryptocurrency?
Plenty of quality assets set out to solve a problem, but not all problems need blockchain solutions. Considering DOGE solves no problem at all, it certainly doesn’t need a token.
Results: Is DOGE a buy?
Based on this 5Ts Test, I give Dogecoin a solid 0/5 stars.
Its team wants nothing to do with it anymore…
…its technology is nonexistent…
…its timing is long past its glory days…
…its tokenomics are massively flawed,
and most importantly…there’s no reason for this token to even exist.
All digital assets worth owning have three characteristics: real-world use, utility, and potential for widespread adoption. The 5Ts Test helps me separate the quality digital assets from the garbage coins like DOGE.
If you’re ready to learn which cryptocurrencies do pass the test and have what it takes to generate profit long-term, I’m hosting a Digital Wealth Master Class on April 7, 2023, at 11:00 a.m. (ET) for anyone who wants to build an expert portfolio.
Signing up for this course immediately unlocks the full 5Ts Test criteria that we’ll cover in-depth on Friday so you can learn how to separate the winners from the wannabes on your own.
I’ll also be revealing my $100 Portfolio, a list of digital assets I would buy with only $100 to spend in the markets.
Want to learn how to decrypt the crypto markets like a pro? Reserve your spot here.
Chief Crypto Strategist, American Institute for Crypto Investors