Behind the scenes of the Dogecoin incident — Elon vs. Bitcoin — Institutions
Dogecoin was introduced by Billy Markus and Jackson Palmer on a rainy winter day on December 6, 2013. The Dogecoin protocol was designed based on Luckycoin and Litecoin. Scrypt was used as the algorithm technology. Therefore, SHA-256 equipment used in Bitcoin mining was not suitable for Dogecoin mining. More complex FPGA and ASIC equipment had to be used.
After going through the technical details, let’s talk about the emergence philosophy of Dogecoin. Discussions like “Who is the real savior (BTC, ETH, Elon, or Satoshi)? Is Crypto a Ponzi scheme? What will China say? Prohibitions, regulations?” existed in those days just as they do today. Dogecoin wanted to put all these aside and add humor to it. Dogecoin did not introduce itself as a project that will save the world. A Meme Coin- Doge was released to add some humor to the current market. People sent each other millions of them as tips. Sometimes people sent it just for fun. However, Dogecoin is a coin with unique cycles. It rises by a few X before almost every bull run and then dumps to the price it started with. This situation is usually the harbinger of green days and sleepless nights. Accumulation for a while and then pump-dump again. Likewise, the start of the bear market usually coincides with the dumping of Dogecoin. There is no such thing that what happened in the past will necessarily happen also in the future, but the past can shed light on the future.
The biggest difference that distinguishes Dogecoin’s sharp price increases this year from previous periods is undoubtedly the Elon Musk factor. We will be talking about this shortly. You can pour yourself another cup of coffee if you want.
We love dogs. But how many dogs are there on the market? Is the dog population under control? Are our cats safe?
Nature has a balance. The food pyramid summarizes the cycle that provides this balance. Excessive amounts of any living thing disrupt the balance. This also applies to dogs, one of our cutest friends. I can hear you ask questions like “what does this have to do with the subject?”. Technically, there is no limit to the amount of Dogecoin. It can be produced in unlimited quantities. Considering that one of the most important details required for fair pricing is the amount of supply and the acceleration of the increase in supply, theoretically, the price of an asset whose supply increases faster than demand should show a downward trend. Yes, when it comes to crypto, it is true that the situation may be slightly shifting from mathematics towards emotionality. We can summarize this as a pump-dump. A coin whose price is constantly rising breaks the emotional resistances that people put on themselves as well as the resistances on the graphic and goes up to the point the market maker desires. For this reason, masses who do not buy Dogecoin at the price of 15–20 satoshi can buy it at the price of +1000 satoshi. Well, is the only reason for this price and liquidity? No: It’s Elon Musk.
During the 2017 bull period, we could not see Elon Musk in the crypto market. However, he prepared well for the next run and dived in. He joined the Dogecoin army on the way he set out as a BTC supporter. He described himself as the commander of this army. But there was a hitch: Dogecoin whales.
Although Elon gave Dogecoin a very strong momentum with his tweets, Dogecoin whales paid no mind. And Elon addressed them in person: “If major Dogecoin holders sell most of their coins, it will get my full support. Too much concentration is the only real issue imo.”
Meaning: “Yes, you have stocked plenty of Dogecoin. You manipulated it, and now it’s my turn. Look, I’m doing free PR for you. Besides, you cannot get anyone to do such marketing even if you pay for it. Sell some of the coins you have. Stop being a dog worshiper. Get rid of the software developer mindset and become a bit of a trader. Like Elite Mangudai, sip your beer and enjoy yourself. Sell it to me and hand it over so that I can dominate. I made you a lot of money for free. This is my cost, and I want to reduce my cost and earn more with what I’ll be getting from you. In short: I trust you even less on this journey, which I started out not trusting you.”
Trust? Yes, Satoshi had explained that before.
Unlimited supply of coins: Yes, Satoshi had explained that too.
I don’t want to put myself in a more ridiculous position than Doge by making a comparison between Dogecoin, a meme coin, and Bitcoin. However, we, who are the viewers of the incident from a distance, also experienced what Elon personally went through.
Unlimited supply, a child prodigy who is today’s hero but tomorrow’s potential beast, a few wallets with a significant portion of the total amount…
Doge was fun. But what about the aftermath? Of course, nobody expects a guarantee. However, what point do you think Dogecoin, whose popularity has increased thanks to Elon, can reach after Elon puts a stopper on this business or something bad happens to Elon or his death (this is not a nice assumption but a reality)? Let’s not just think of it in the context of Dogecoin or Elon. We can also think of any concept that is indexed to people. For example, where do you think Ethereum, which I support, will end up after the death of the child prodigy Vitalik? Yes, it’s not just Vitalik that works for Ethereum. But let’s focus on the main issue here…
Satoshi? Satoshi RIP. Perhaps that’s what Bitcoin gets strength from.
Institutions have arrived, to the moon, 1 sat:1 dollar, When Lambo?
I think that a large audience misunderstands the purpose of corporate firms investing in cryptocurrencies. Time will tell.
First of all, the purpose of the existence of corporate companies is to make a profit. As with ordinary crypto traders, emotions are not involved. For example, you cannot hear the word HODL from any corporate company. You cannot hear the word HOLD either. You cannot see in them the great volunteering, loyalty, and devotion you have shown. They mainly entered the market this year. And they especially waited for the $20K peak to be exceeded to enter. They will take their profits and leave. However, not all corporate companies behaved as ethically as we thought when buying BTC. Even in the bull market we are living in now, there have been reports after some red candles: XXX company bought ZZZ amount of BTC at an average price of YY. What a coincidence!? These announcements were made after a few weeks and sometimes a few days of price pressure.
The main issue is that no one is selling BTC except the miners right now. Of course, traders do buy and sell. However, large masses are not currently trading. This has been the case for a very long time. When the amount of BTC that miners produce daily is not enough for the liquidity that corporate companies want to buy, the price decreases. How? It’s the CEXs.
Open the BTC/USD graphics for some major exchanges. Look at the bearish candles just before a well-known corporate company announced that it has made a purchase. Look at these candles specifically as 15 min/5 min. If you have some graphic reading experience, it won’t take long for you to realize that this move is not organic and is manipulated by bots.
As a result, Bitcoin doesn’t need corporate companies/institutions. They didn’t come to distribute Lambo to us. When the day comes, they will leave the market, after making a profit with hard sells and short positions. When that period comes, we will be alone again. Bitcoin will continue down the road with its loyal audience, namely holders. But a day will come when they will want to hold BTC in their balance to hedge their funds. And not just them. States will want that too.
I summarized my ideas about the relationship between institutions and BTC. However, I have to add a few details for Elon in this regard. Elon and BTC are formally in a relationship that contains mixed feelings. It’s sometimes intense love, sometimes a fight. BTC may be complaining about Elon’s frequent smoking of marijuana and unbalanced behaviors. I don’t know. I will call Satoshi and ask, I hope he’ll answer my call. What sets Elon apart from other corporate companies is that he made BTC purchases organically. He did not cooperate with CEXs like many other corporate companies. He did not say “Hey CEO! You repress the price, I will buy it, your stock market will get volume, the market will move… Win-win bro, ok?” He bought it in person. As I explained earlier, you will understand things better when you compare the graphics with the moment Elon bought BTC.
Why is Elon now anti-BTC and nature friendly? Why Doge?
First of all, I do not believe that there is such a concept as nature friendly for businessmen. But it’s obvious that some (other corporate companies benefiting from Elon’s free PR works) made Elon angry. What lies behind this is the manipulative attitudes of some other corporate companies during their BTC purchases, unlike Elon. As I mentioned earlier in this post, Elon’s purchases were in the form of Big Green Dildo, while purchases of some other corporate companies were made with the help of red candles. If you put yourself in Elon’s shoes for a moment, this must be something like “being treated like a fool”.
We don’t think Elon is just beginning to realize that there is energy consumption during Bitcoin mining, right? I think his focus is on the concept of “decentralized”. What Elon’s trying to say must be the following: “Bitcoin must remain decentralized. However, if you, corporate companies, cooperate with CEXs and make your purchases by repressing the price, that is, try to keep Bitcoin away from being decentralized, then we will create our own Bitcoin. And we will do this with meme coin, which is non-assertive. It’s called Doge.” In fact, DOGE was an expression of a rebellion. Although it was not decentralized enough, it was what Elon preferred.
It is pretty clear that Bitcoin will remain as Bitcoin despite everything, and Doge or other BTC killers will be forgotten somehow. If Elon’s negative statements are not just a strategy and Elon is indeed attacking BTC, BTC will beat Elon as it did beat the others. If this is a strategy, BTC will be the winner. In other words, BTC will win in any case. Elon himself will decide whether to become the new McAfee or not.
Conclusion: Hold satoshi, be aware of DOGE, respect to Elon.
Next article: Birth of the King