Jul 7, 2021
Elon Musk is pumping a new Dogecoin clone
After his failed Bitcoin pirouette, the cryptocurrencies’ godfather Elon Musk has switched his attention to a new project: Baby Doge.
It’s suspected that Musk is pumping the crypto asset. A pump is the aggressive purchase of a low-liquidity asset whose price leaps upwards when sudden large purchases are made because of its low trading volumes. Multitudes of speculators then join in. As the price grows, the manipulator dumps the assets he/she purchased, making a profit on this artificially created trend. When the influx of buyers runs out, the price usually returns to its original level.
Musk has already been suspected of pumping Bitcoin and Dogecoin. Former Securities and Exchange Commission analyst Mark Powers has called on the regulator to check Musk’s crypto tweets for breach of trust because such declarations can cause multimillion losses for his subscribers. And some former Musk fans have started the #stopelonmusk movement.
Musk is a controversial figure because he continued lauding Dogecoin after his rejection of Bitcoin. However, both coins use proof of work (PoW), which requires the participation of miners and are, therefore, not eco-friendly.
Now, however, Musk is pumping Baby Doge, a coin whose price has increased by 500% and whose trading volume has risen three times since this tweet by Musk.
Dogecoin’s success has led to the emergence of hundreds of clones. As a result, Thailand has banned meme tokens on the basis that they don’t have any fundamental value and are highly dependent on the influence of media celebrities. The authorities’ apprehensions are not unfounded: since May’s highs, when Musk was on a roll, Dogecoin has dropped nearly five times in value.
The new Doge clone has low fees, and coin holders receive a distribution of 5% of each transaction fee on the network. However, the tweets of a single billionaire are not enough to make Baby Doge (which is just under a month old as of the time of writing) a really popular project.
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