Yerevan (CoinChapter.com) — Dogecoin (DOGE) has become tightly associated with the name of Elon Musk, the millionaire entrepreneur and chief executive of Tesla and SpaceX. The CEO often toys with the market by tweeting about the token and promoting its price.
Brian P. Brooks, the former Comptroller of Currency, warned Mr. Musk against the ‘hype behavior’ — artificially spiking the Dogecoin price — stating that it can have a regulatory backsplash on the Bitcoin market. Officials could end up over-regulating the Bitcoin industry after assessing price manipulation characteristics in the Dogecoin market.
Pump and Dump is a scheme that comes to mind in the discussion on market manipulation. The scheme’s objective is to create hype around a product, or in this case, token, exaggerate its value, and then sell it for a significantly higher price than it cost in the first place.
And though “Pump and Dump” are illegal if the exaggeration involves fraudulent price manipulations, the regulations concerning cryptocurrencies are not yet clear and effective. Mr. Brooks had also been vocal on the necessity to regulate the cryptocurrency market.
Elon Musk, the self-proclaimed “Dogefather,” has a long history of promoting Dogecoin on social media. Every time the price would rocket, Doge traders jumped on the opportunity to pump their favorite token.
In more recent tweets, the billionaire seemed determined to improve Dogecoin’s blockchain. He urged Doge supporters to join a subreddit to brainstorm ideas.
However, It remains unclear if he has a ‘doge in the fight’, or he’s trolling the market just for the fun of it. There has been speculation, that Mr. Must is the mysterious whale holder of a dogecoin wallet worth $12 billion.
Mr. Musk was recently blamed for another market manipulation, with far worse repercussions. On May 13, he announced that his company Tesla is taking a step back from the initial stance on Bitcoin, and would no longer accept payments in the cryptocurrency. The alleged reason came down to the devastating carbon footprint of mining, which the CEO knew about all along.
His announcement became the first step in the downward spiral for the crypto market. The alpha cryptocurrency is still struggling to recover, which led to further decline by Dogecoin as well.
It is not clear whether the billionaire has personal agenda when it comes to Bitcoin and Dogecoin. Or, whether or not he’s enjoying the influence he has over the market. Either way, Dogecoin’s “fun” might end up with substantial regulatory problems for the entire crypto industry, especially Bitcoin, if he doesn’t cease the light-minded behavior.