Key Takeaways:
- Elon Musk has stopped Tweeting about his favorite cryptocurrency, Dogecoin (DOGE).
- The billionaire is caught up in legal troubles amid losses in advertising revenue.
- A potential spot Bitcoin ETF is costing DOGE dearly.
YEREVAN (CoinChapter.com) — Dogecoin (DOGE), the dog-themed meme cryptocurrency, frequently experienced surges in value when its most prominent supporter, Elon Musk, mentioned it. His support for the token was so frequent and public that he dubbed himself the “Dogefather.”
Last April, DOGE’s price jumped over 30% after Musk changed Twitter’s (now X) logo to an image of a shiba inu dog, the altcoin’s symbol. However, Musk’s dedication to the meme token has dwindled. He is no longer so regular or vocal about his support for it.
The reasons for this lost passion may lie in all these factors.
1. Elon Musk’s legal troubles
Earlier this year, Elon Musk faced serious allegations of using a “pump and dump” scheme to profit from the price of Dogecoin (DOGE).
Following his appearance on NBC’s Saturday Night Live, a group of Dogecoin (DOGE) investors accused him of utilizing his social media platform to increase the value of the cryptocurrency artificially. According to them, Musk’s illegal actions included selling approximately $124 million of Dogecoin in April.
Musk has since denied these charges. But his legal troubles are far from over. The US Securities and Exchange Commission (SEC) is suing Elon Musk because he refused to participate in an investigation of his acquisition of Twitter stock in 2022.
According to the SEC’s complaint, Musk was slated to testify on Sep. 15 following a subpoena. However, “just two days before his scheduled testimony, Musk abruptly informed the SEC staff that he would not be appearing.”
Moreover, he raised, according to the SEC, “several spurious objections, including an objection to San Francisco as a suitable testimony location,” according to Reuters.
Musk’s consistent delaying tactics and failures to appear for testimony prompted the SEC to seek court intervention in compelling his testimony.
The subpoena is connected to an ongoing nonpublic investigation by the SEC regarding Musk’s potential violations of securities laws concerning his 2022 Twitter stock purchases and his statements and filings regarding the company.
In April 2021, the SEC had questioned Musk’s disclosures about these acquisitions.
2. Musk’s Twitter (X) problems make Dogecoin seem unimportant
Elon Musk loves DOGE. But perhaps not quite enough to prioritize it over his traditional businesses. Social media platform X, one of his latest pet projects, is in trouble. Its finances are tanking.
Charts compiled by BusinessOf Apps based on company data paint a bleak picture. The social media giant may not be making the big dollars Musk envisioned when acquiring it.
Amid these falling revenues, the Tesla CEO’s knack for making new enemies doesn’t help him.
One such enemy that is costing him dearly is the Anti-Defamation League (ADL). The Jewish group stands as the foremost American organization committed to combatting antisemitism. With a substantial team focused on monitoring antisemitic and extremist actions, it produces annual reports that document antisemitic incidents.
Since Musk acquired the social media platform last October, the ADL has grown progressively more apprehensive about his choices in fostering a secure environment for antisemitic individuals.
In December 2022, ADL published a blog titled “Extremists, Far Right Figures Exploit Recent Changes to Twitter.” The organization strongly disapproved of Musk’s choice to sell the “verified” blue checkmark and offer “amnesty” to suspended Twitter accounts.
This, among many other protestations, put the world’s richest man at odds with the group. Around the same time, the platform’s advertisers began deserting it.
Musk blames ADL for massive losses
X makes a large chunk of its revenue from advertising. In 2022, the company billed over $4 billion in ads. But these advertisers are moving away.
The Tesla chief now believes the Anti-Defamation League is responsible for pushing advertisers away.
In a Sep. 5 post, Musk attributed most of the revenue loss to the ADL. He estimated the group’s responsibility to be at least 10% (roughly $4 billion) of the value depreciation.
Based on Musk’s tweet, if the $4 billion loss due to ADL is 10%, the firm’s loss amounts to $40 billion. This is significant because he purchased the company at $44 billion.
This suggests that the platform’s current value has plummeted to $4 billion (the $44 billion purchase price minus the $40 billion decrease in “value”).
Whether this interpretation of his post holds water is debatable. But one thing is clear. His company is not doing well, and Musk is not ready to prioritize Dogecoin (DOGE) over it.
3. Falling interest in Dogecoin (DOGE) amid Bitcoin ETF buzz
The crypto market remains enthusiastic about the possible approval of Bitcoin exchange-traded funds (ETFs). Even after encountering regulatory obstacles, the industry’s optimism that a Bitcoin ETF could potentially fuel rapid growth continues to be a source of excitement.
Recently, ARK and 21Shares, two giants eyeing approval, updated their spot BTC ETF applications. This did not go unnoticed by industry insiders.
Many have taken this as a sign that the SEC will soon approve a Bitcoin ETF.
There has been a noticeable decline in Dogecoin’s network activity in recent months. This is particularly reflected in its daily transaction volume. According to data from IntoTheBlock, the DOGE transaction volumes have seen a sharp decline from its June high of over 2.1 million.
Moreover, Bitinfocharts puts the daily transactions for the Dogecoin network at around 30,823 in the past 24 hours.
Moreover, nearly 60% of those who hold the meme token are currently in losses. Given these factors and the rising excitement about Bitcoin ETF, there is a decrease in investor interest in DOGE.
Hence, it makes sense that Elon Musk has stopped posting about Dogecoin. After all, it is perhaps not the right environment, and he has bigger fish to fry right now.
