The Dogefather Returns: How Elon Musk and Donald Trump Are Pumping the Meme Coin to New Heights

After a three-year plummet, dogecoin is blasting off again, jumping 250% since the election of Donald Trump – part of a broader wave of optimism in the industry

After a three-year downturn, dogecoin is surging again, gaining 250% since Donald Trump's election - part of a broader wave of optimism in the industry, thanks to Trump's courting of crypto proponents during his campaign.

Trump's informal appointment of Elon Musk to what he calls the Department of Government Efficiency - D.O.G.E for short - also helped propel the dog-themed meme coin.

This isn't the first time Musk, who styles himself as "the Dogefather," has sparked interest in dogecoin.

In May 2021, its price soared ahead of Musk's guest appearance on "Saturday Night Live." During a skit, Musk played a financial analyst chatting with a Weekend Update host, who kept asking him, "What is dogecoin?" After some evasiveness, Musk's character finally admitted that it was a hustle. The coin's price then went into a tailspin. Just over a year later, it had lost over 90% of its peak value.

The losses hit small investors hard. In 2022, one of them filed a class action lawsuit against Musk for market manipulation and insider trading, though the case was dismissed in August 2024.

So why has dogecoin - a meme coin that was never meant to be taken seriously as an investment - seen such wild swings in value?

We're all in this together

Dogecoin was launched in 2013 to poke fun at bitcoin and a host of other cryptocurrencies that were claiming to disrupt the traditional world of finance. Two strangers from opposite sides of the globe met online, copied the code of an existing coin, and slapped on it the already-popular Doge internet meme - a picture of a Shiba Inu dog surrounded by fragments of broken English: "wow much coin."

Even though their main goal was to make the coin pointless and undesirable, it became one of the most popular and enduring cryptocurrencies on the market.

After dogecoin's previous surge in 2021, I examined how its fervent network of influencers and everyday investors worked together to bring a huge amount of attention - and capital - to the joke currency.

To understand the appeal of these absurd investments, you have to look at the time and energy that users put into these networks and the rewards, both financial and social, that they get in return.

Meme coins are collaborative ventures. Members of these online communities have a financial incentive to become outspoken boosters: The more dogecoin's value rises, the bigger their investments grow. But they also get social validation from other meme coin investors when they hype up the coin.

In other words, behind every meme coin is a collective of strangers on a shared mission to make a lot of money.

Dogecoin and its copycats have been described by their leaders as crypto movements, shared journeys, and community-owned projects. Beyond branding the assets with culturally resonant images, whether it's a Shiba Inu dog or Pepe the Frog, successful crypto ventures are marked by intricate webs of trust. Trust in the technology. Trust in its potential for future appreciation. And trust that those in power in the networks won't fleece the rest.

This allegiance is woven among a global network of users who collaborate around the clock to promote their coin and demonstrate their unwavering commitment to its success.

During times of price appreciation, the collective buzzes with elation.

Throughout price dips, community members mutually reinforce their comrades' - and their own - beliefs that this is just a bump in the road and that their collective efforts will ultimately lead to a handsome payoff. Even in the coldest of crypto winters, this ritualistic behavior helps these speculative communities persist. Community serves as a salve for financial loss.

The investment strategies in these communities - and the belief in their payoff - involve repeating and reposting what others have said, like any traditional internet meme.

Trolling traditional valuation

The intrinsic value of meme coins can't be understood in the same way as traditional assets, like stocks and physical commodities. These types of assets have fundamentals, such as a company's financial statements, or public demand for basic goods, from coffee to oil.

By contrast, the fundamentals of meme coins are reflected in their network activity, such as daily active users, and less tangible metrics, such as social sentiment and mindshare - how much public awareness a coin has generated relative to its competitors.

Of course, the valuations of traditional assets are also influenced by these social factors. The difference is that meme coins offer little in the way of productive activity. They add nothing to the economy. Sometimes their leaders will build financial services around them, but these are usually added as afterthoughts, mainly as a way to drum up more speculative excitement.

Meme coins troll the traditional conventions of valuation and flout the edicts and dogmas of mainstream investors.

And that's precisely the point.

Participation in meme coin communities - or any crypto community,