The Year in Dogecoin: Elon Musk's Favorite Crypto Makes a Comeback

From decrypt by Liz Napolitano

Dogecoin has soared this year. Image: Shutterstock

With crypto flying high in 2024,  Dogecoin  holders are determined to take their multi-million-dollar meme coin to the moon. 

And if recent events are any indication, the coin—often showered with attention by billionaire Elon Musk—is already part of the way there. 

Dogecoin has had a knockout year, from hitting a three-year-high price to becoming the namesake of a U.S. extra-governmental initiative, and even inspiring new exchange-traded products. 

Although its network fielded some technical issues recently, the Shiba Inu-inspired token is still heading into the new year with plenty of momentum. 

Musk and Trump drive DOGE

Dogecoin soared to a  three-year high  of $0.48 in early December as President-elect Donald Trump and ally Musk stoked positive investor sentiments toward digital assets.

The digital currency peaked at an all-time high of $0.73 in May 2021, and had spent the following years well below that mark until its recent resurgence.

Dogecoin's price began pumping a couple months ago as self-styled crypto champion Trump blazed a path towards retaking the White House. His victory on Election Day sparked a broader crypto market enthusiasm that has benefited meme coins, including Dogecoin.

The token has also rallied multiple times after Musk, in a series of posts on X (formerly known as Twitter), referenced the digital currency alongside a proposed government agency aimed at cutting bureaucratic spending.

Musk, Ramaswamy to lead DOGE

Shortly after Election Day, Trump announced that Elon Musk and entrepreneur Vivek Ramaswamy  would lead  an extra-governmental U.S. department that shares a name with Dogecoin.

The Department of Government Efficiency, or DOGE, aims to slash U.S.  government spending , reducing the federal budget deficit. Musk  teased the initiative  for weeks before it was officially announced, much to the excitement of Dogecoin holders.

"We will also have a leaderboard for [the] most insanely dumb spending of your tax dollars,” Musk said in November on X. “This will be both extremely tragic and extremely entertaining."

Dogecoin's price also pumped after Musk shared his plans for the initiative at a  Trump rally  in October. Although DOGE is apparently named after Musk’s beloved meme coin—its acronym matches Dogecoin's ticker, plus Trump is selling t-shirts with himself and Musk alongside a Shiba Inu dog—the initiative itself has nothing to do with crypto.

Dogecoin hits technical hitches

Dogecoin hit an unexpected snag earlier this month when a blockchain builder allegedly crashed about 70% of public nodes on the network.

Andreas Kohl  alleged  in an X post on December 11 that he took down hundreds of public nodes that purportedly back the Dogecoin network. He said he exploited a “Death Note” bug in the blockchain's code using an old laptop in El Salvador. 

A “Death Note”  bug  enables an individual to cause a node to die of a segmentation fault, according to software engineer Tobias Ruck, who helped identify the vulnerability.

However, the Dogecoin Foundation later alleged that Kohl's claim was false, arguing that more than 1,000 Dogecoin nodes remained unaffected during the alleged attack. The Foundation also noted that the network held up against the attempted takedown.

Still, the competing allegations stirred up a storm within the Dogecoin community. Some community members argued that the bug exposed major security flaws in the network.

“Anyone could crash the entire Dogecoin network in an instant,” Kohl said in an X post. However, the Dogecoin Foundation pushed back against those concerns.

Dogecoin Foundation Director Timothy Stebbing told Decrypt that the bug isn't as big a deal as it may seem. It was patched in early December, and node operators have gradually updated their devices to protect them from the vulnerability, Stebbing said.

According to Stebbing, the blockchain also has many privately operated nodes, which makes them harder to identify and take down than the public nodes that may have been affected in the alleged attack.

Dogecoin ETFs—yes, really

With spot  Bitcoin  and  Ethereum  exchange-traded funds clinching approval in the U.S. earlier this year, it's possible  Dogecoin-based ETFs  could one day also become available to investors in the U.S., analysts told Decrypt. 

“The ETF industry is famous for throwing spaghetti at the wall,” Bloomberg ETF analyst Eric Balchunas told Decrypt in November. “I imagine we'll see all kinds of stuff get attempted, including DOGE.”

Whether such ETFs will win approval within the next year remains to be seen, but some issuers are already considering offering funds backed by the Shiba Inu-inspired token. According to a blog post published last October, Grayscale is already considering Dogecoin for inclusion in its future exchange-traded products.

Valour, a subsidiary of Canadian crypto firm DeFi Technologies,  unveiled  the Valour Dogecoin (DOGE) SEK ETP in Sweden this November, marking the first exchange-traded product in the region offering exposure to the meme-inspired crypto.

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