They thought it was going to make them rich.
Some of them still do.
Desperate to cash in on this year’s crypto boom, thousands of financially-distressed pilgrims around the world sank their savings into a joke coin that a software engineer designed on a lazy afternoon. Until 2021 financial mania hit, dogecoin was basically worthless.
Even people like me who’d heard about doge years ago had forgotten about it. The coin was an internet relic, like MySpace and Geocities.
Now it’s a cautionary tale happening in real time.
The tail is wagging the dog.
Literally.
Dogecoin was just waiting to be used as a tool to profit off the poor, the uneducated, or just plain inexperienced.
The cryptocurrency had already been involved in one scam run by a serial rapist going by the name Alex Green, who raised a fortune off doge in 2014 through an app called Moolah. He then tried to disappear with the money. Now he’s in jail, where he belongs.
History isn’t waiting long to repeat itself anymore.
Ever since Alex Green, someone has always tried to run some kind of scam off dogecoin, either stealing tips or just pumping up the price to lure in newbie traders, then dumping it.
So it shouldn’t shock anyone that mysterious forces have spent the last several months buying up huge amounts of doge, trying to engineer scarcity. One group even hired a rapper named Soulja Boy to do a video spot for them in January. If Soulja looks familiar, you probably recognize him from his involvement in the Fyre Festival, which lured hundreds of influencers to an island party with no performers… or bathrooms.
Scammers are like zombies that way.
They keep coming back.
There’s something about celebrities that seem to make them want to push useless garbage on the rest of us. Whether it’s goop or weight loss apps, they just can’t seem to enjoy the wealth they’ve already got. They have to trick desperate, uneducated people into giving them more. And so it was that Elon Musk joined the doge party, driving up prices with an endless stream of memes. More celebrities hopped aboard.
Even Snoop Dogg has showed up:
Even now, nobody can tell if they were officially endorsing the asset, or just kidding around. Turns out, that was the point. Everything’s a joke on social media, except when it isn’t.
Lots of people started falling for it.
They read Musk’s ironic tweets as a secret message. They thought millionaires and billionaires were whispering in their ear that doge was going to take over the world. So they started dumping their savings into it, terrified of missing out on yet another chance to turn pennies into profit.
By Superbowl time, the internet was paying more attention to a little dog than the actual field. The community’s Reddit page attracted more than a million subscribers, mostly newbies who couldn’t stop posting messages like “HODL!” and “I got diamond hands!” There were posts asking beginner questions like, “How do I buy doge!?!?”
People who hadn’t even shown enough interest in cryptocurrency to criticize it beforehand were now suddenly sinking thousands of dollars into something they barely understood. Some of them were literally waiting on paychecks to clear so they could buy more.
They had no idea what they were getting into. And currently, their situation isn’t looking good. Here’s the weekly outlook for doge, according to the chart I’m watching on Binance:
See those straight red lines down?
That’s not good.
Compare doge to bitcoin’s trends:
The promise of financial freedom can shut down your brain, so a lot of new doge hodlers aren’t looking at charts. They’re not thinking about which crypto to buy, or if they should at all.
All they know is that the world’s richest man and the world’s most famous rapper have encouraged them to make something out of nothing, which is the American way. All they have to do is buy a few thousand dollar’s worth of doge, then sit back and post memes.
They make it look so easy.
Excitement over doge has continued. Billboards have started springing up all over the country, and Redditors have reveled in posting about them. CNBC did a bit on doge’s meteoric rise to the top ten cryptocurrencies. Stories have appeared on financial news outlets.
People are going wild.
Many of the novice investors posting on Reddit have no idea that smaller altcoins can jump up and down by as much as 30 percent in a single day. In fact, that’s how lots of people make money off these currencies, by watching trends and manipulating them.
You can make thousands that way. It’s not even hard. You just need a big bank account to play with, and a lot of free time.
Most people don’t. They’re emotionally attached to their money, which makes sense in today’s economy. They don’t have the stamina to wait out disturbing plunges. They just think they do, until an emergency pops up and they realize all their cash is tied up in crypto.
It’s a problem.
It didn’t take long to see clearly what was going on. Doge had attracted thousands of newcomers with all the hunger of a trader but none of the knowledge or resources.
The original creator of doge coin tried to warn them, but his post disappeared.
Doge hodlers have started to feel like this:
As you’d expect, dogecoin’s price started to wobble after its surge. People panicked, for good reason. Some of them were using retirement savings, or college tuition money. It wasn’t long before they started posting desperate messages like, “Stop selling! I really need this!!”
As the price continued to shoot up and down, lots of them made the classic beginner’s mistake of panic-selling.
Kids like this lost thousands of dollars:
Hundreds of cynical investors replied to these kinds of tweets, heaping on gleeful amounts of judgement and ridicule.
Some were especially harsh:
Those who judge newbie investors practice their own kind of moral naivety. It doesn’t seem to occur to them that they’re directly profiting off these newcomers, even preying on them.
They’re bragging about it.
It’s not surprising when you learn more about the kind of people who do this, especially their value systems:
Of course amoral Trump supporters would be the ones behind a classic pump-and-dump scheme. It’s perfect behavior for them.
This is what their hero does.
They’re just like him.
Most of us chuckle at the ignorance on display right now during the meme stock rallies. I’ve made jokes and sarcastic remarks about it myself, only to see some people take me seriously.
So I’ve had to start being more careful. We forget what true desperation makes us capable of.
It can drive you to act against your self-interest.
America has always encouraged magical thinking when it comes to money and health. We’re always jumping headfirst into the next bubble, certain that this time everything will work out. Meanwhile, we blame people for falling into the traps we set for them.
We never seem to ask what responsibility someone like Elon Musk has, or whether he should be the one showing a little more self-awareness and restraint. Instead, he often acts like a 14-year-old. On the topic of doge, only when reporters pressure him does he concede that he’s “mainly just kidding.” The next day, he goes right back to doing the same thing.
He just doesn’t get it.
With great influence comes great responsibility.
It would be nice if the richest man in the world could stop for a minute and reflect on what his status does to vulnerable people. Maybe he could rein in his Twitter habit, at least when it comes to toying with the financial circumstances of ordinary people.
Of course, he probably won’t.
