(Kitco News) – Meme coin mania experienced a revival on Thursday after a video of Tesla CEO Elon Musk hinting that the electric-car manufacturer could add Dogecoin as an official payment method for Tesla cars “at some point” circulated on social media.
Musk made the comment in response to a question from an audience member at the Berlin Gigafactory, who asked if a Tesla could be bought using DOGE in the near future.
“At some point, I think we should enable that,” Musk responded. He also noted that fans can still use DOGE to buy Tesla merchandise, and then appealed to the crypto degens in the crowd by saying, “Dogecoin to the moon.”
As the event was in Germany, the video was posted in the late hours on Wednesday for readers in the U.S. DOGE price spiked nearly 17% almost immediately after the video was posted, surging from $0.165 to a high of $0.193, and has since drifted lower to support at $0.178.
DOGE/USD Chart by TradingView
Musk also recounted why he first started to back Dogecoin, noting that he received requests from employees at a Tesla Gigafactory to add DOGE as an official mode of payment. SpaceX visitors also requested that he add support for the popular meme token, he noted.
“Doge is people’s crypto, so I will support it,” Musk said after adding DOGE as a payment option for merchandise. Since Bitcoin has gotten so much support from wealthy people, Musk said he wanted to support a crypto that is preferred by the general public.
It turns out that what is good for DOGE is good for all meme-kind as multiple tokens rallied on the back of Dogecoin’s strength. At the time of writing, dogwifhat (WIF) is up 42.3%, Bonk (BONK) has gained 17.7%, Pepe (PEPE) has climbed 16%, and Memecoin (MEME) is up 11.6%.
Notably, dogwifhat is outperforming the field after its community of supporters raised $700,000 through its “Sphere Wif Hat” campaign. The fundraising campaign launched on March 10 with the goal of featuring the token’s logo on the Las Vegas sphere, a development that highlights the collaborative nature of the meme coin community.
Hours before Musk made his comments that sent meme coins soaring, U.S.-based multinational investment firm Franklin Templeton published an investor note on the often maligned asset class titled The Value Between Meme Coins and Their Native Networks, which said that while they “have no inherent value or utility,” such tokens could potentially make for fast gains.
The report said that the price performance of meme tokens is “akin to a meme going viral on the internet,” and they’ve gained popularity in the last year due to their “unique nature.” They also don’t require the same technical knowledge as other sectors of the crypto economy, have low fees compared to other cryptocurrencies, and have the potential for quick profits for those who want to brave the volatility.
The analysis also said that meme coins “have a strong relationship with their native networks,” and referenced the rise of BONK on Solana, which has climbed from $0.00000015 at the end of 2022 to its current price of $0.000033, an increase of 21,900%.
Aside from Musk’s endorsement and the positive report from Franklin Templeton, cryptocurrency market intelligence firm Santiment said that meme coins are benefiting from profit redistribution as Bitcoin (BTC) hits new all-time highs and long-term hodlers rotate.
? #Memecoins had another big day as #Bitcoin's #AllTimeHigh notched above $73.6K. With each $BTC rise in March, it appears profits are quickly being redistributed to speculative assets with low liquidity. Track #memecoin metrics on this useful watchlist: https://t.co/XgaeFiQ8XG pic.twitter.com/9bl4L2TVbm
— Santiment (@santimentfeed) March 13, 2024
While many crypto holders are elated at the return of meme coin mania, Dessislava Aubert, a research analyst at Kaiko, warned that skyrocketing meme token prices have often preceded a crypto market pullback.
“Historically, a surge in meme tokens has often signaled a market top,” Aubert told the Business Times. “However, it is difficult to predict whether this will continue to be the case now as new capital is entering the crypto markets. We also observe that some of these tokens are increasingly driven by idiosyncratic factors and are less correlated with Bitcoin.”
