Dogecoin’s value tumbles after Elon Musk calls the virtual currency a ‘hustle’
The price of dogecoin tumbled by as much as a third on Sunday, after billionaire Elon Musk, one of its biggest supporters, appeared to call the virtual currency a “hustle” while hosting Saturday Night Live.
Cryptocurrency watchers had high expectations of what Tesla chief executive and crypto-enthusiast Musk, who has called himself the “Dogefather”, would say while hosting the American comedy sketch show, and dogecoin had risen in anticipation.
However, Musk’s appearance had the opposite effect to that expected by investors.
Dogecoin, a cryptocurrency similar to bitcoin which was started as a joke, fell by 35% at one point to reach $0.47 (£0.34) against the dollar, according to news website Coindesk. By Sunday evening (UK time) it had recovered slightly to reach $0.49, although that was well below the $0.68 it hit before the weekend after surging interest from investors.
The value of the digital currency began to drop sharply during the programme, which was streamed internationally on YouTube for the first time.
During the broadcast Musk introduced viewers to his mother, Maye, who said she was excited about receiving a Mother’s Day gift from her son but added: “I just hope it’s not dogecoin.”
In another part of the show Musk was asked: “What is dogecoin?” He replied: “It’s the future of currency. It’s an unstoppable financial vehicle that’s going to take over the world.”
When a cast member, Michael Che, countered: “So, it’s a hustle?,” Musk responded: “Yeah, it’s a hustle,” and laughed.
The segment ended with Musk howling “to the moon”, a phrase used online by investors trying to talk up the value of their assets, indicating the desired direction of travel for their investments.
Musk also claimed to viewers that he was “the first person with Asperger’s” to host the US sketch show, although Dan Aykroyd, the former cast member and previous host, has said in the past that he has Asperger’s syndrome.
Opening the programme, the billionaire spoke of how he sometimes posted strange comments on his social media, saying: “To anyone I’ve offended, I just want to say, ‘I reinvented electric cars and I’m sending people to Mars in a rocket ship, did you also think I was going to be a chill, normal dude?”’
Dogecoin has been attracting attention after it found favour with retail investors and won over high-profile fans including rapper Snoop Dogg and the Kiss bassist Gene Simmons.
The currency is based on an internet meme – a humorous online phrase or picture – in this case, a shiba inu dog.
Like the bitcoin and ether cryptocurrencies, it has enjoyed a stratospheric rise in recent months, and climbed 14,000% between January and early May.
Novice investors’ appetite to speculate in certain stocks, as well as cryptocurrencies, has been growing in recent months, leading analysts to warn that people could end up losing large amounts of money.
Digital currencies have attracted more attention both from investors and financial institutions in recent months. They have soared to multiple record highs, with bitcoin briefly hitting $63,000 last month, but their rollercoaster ride has also included significant one-day falls.
Their volatility and vulnerability to theft or hacking have led regulators, including the Bank of England, to view cryptocurrencies with scepticism, even while they are gaining more mainstream acceptance as a payment method.
The US Treasury has proposed a crackdown on transfers of digital currency in order to prevent their use in money laundering or other illegal activity.
Cryptocurrencies are also increasingly criticised for their environmental impact, given the huge amount of energy required to create them.
Even following its weekend falls, dogecoin, once described as the “people’s crypto” by Musk, remains
the fourth-largest digital currency after bitcoin, ethereum and binance coin, according to data website CoinMarketCap.