Dogecoin (DOGE) originally launched as a joke cryptocurrency featuring a Shiba Inu dog meme. Yet it has evolved from an online novelty into a digital asset today worth billions. What began as a satirical commentary on cryptocurrency speculation in 2013 now commands serious attention from investors, regulators, and the media.
Key Takeaways
- Dogecoin has transformed from a “joke” meme into a multi-billion dollar asset.
- DOGE’s value proposition appears to rely almost entirely on community sentiment, speculative hype, and celebrity endorsements.
- DOGE has an infinite supply, introduces no new technological innovations, and has minimal real-world applications
- While speculative trading and celebrity promotion alone don’t necessarily constitute fraudulent activity, they do raise important regulatory considerations.
A Brief History of DOGE and Current Market Cap
Dogecoin emerged in December 2013 as a lighthearted social commentary to crypto’s growing popularity and a proliferation of dubious “altcoins” at the time that turned out to be nothing more than get-rich-quick schemes. Still, the meme caught on and gained a devoted following in the cryptocurrency community.
DOGE remained a niche cryptocurrency trading under one cent until 2021. Then, riding a wave of meme stock enthusiasm and (initially ironic) celebrity endorsements, its market cap exploded from a few hundred million dollars to peak above $88 billion during the crypto bull run (as of November 2024, it stands at around $54 billion).
Why DOGE May Be Considered a Scam
Critics argue that DOGE exhibits several hallmarks of a scam. Unlike Bitcoin’s fixed supply of 21 million coins, DOGE features an infinite future supply and issues approximately 10,000 new DOGE every minute–which amounts to an unlimited supply. This monetary policy, combined with concentrated ownership (with the top 100 addresses holding over 65% of the supply), raises concerns about price manipulation and its long-term value proposition.
Furthermore, DOGE’s development activity has been relatively stagnant compared to other major cryptocurrencies. A clone of the Litecoin cryptocurrency, DOGE has introduced no significant innovations or technological advancements, instead riding entirely on social media hype and celebrity endorsements.
These characteristics make some wary of Dogecoin’s legitimacy as an investment.
Why DOGE Might Be a Security (And Who Decides)
While speculative trading and celebrity promotion don’t necessarily constitute fraud, they do raise important regulatory considerations.
The SEC would be the primary authority in classifying DOGE as a security, using the “Howey Test” as its primary framework. Under this test, a security exists when investors expect profits generated from the efforts of others.
The decentralized nature of Dogecoin complicates this classification. Moreover, recent cryptocurrency enforcement actions suggest the SEC is particularly concerned when price appreciation depends heavily on promoter activities.
Why DOGE Might Be a Commodity (And Who Decides)
The Commodity Futures Trading Commission (CFTC) has historically taken a more accommodating stance, sometimes viewing cryptocurrencies as commodities under the Commodity Exchange Act, following a 2015 determination that virtual currencies could be classified as commodities.
A commodity classification for DOGE could be supported by its value being derived primarily from market supply and demand dynamics rather than inherent utility or revenue streams like dividends or interest. There is also something to be said about its “mining” process, similar to Bitcoin’s, which could be seen as paralleling traditional resource extraction.
If ruled a commodity, it would likely result in lighter disclosure requirements than securities regulation while still maintaining protections against fraud and market manipulation under CFTC oversight.
What About the D.O.G.E. Commission?
In 2024, Donald Trump announced plans for a Department of Government Efficiency (D.O.G.E.), to be led by Elon Musk and Vivek Ramaswamy. While the naming appears to be a deliberate reference to Dogecoin—particularly given Musk’s well-known advocacy for the cryptocurrency—this advisory commission has no regulatory authority over cryptocurrencies. The commission’s mandate focuses instead on government spending cuts and bureaucracy reduction.
The Bottom Line
Finally, in doge speak; such regulatory. much confusion. wow! how classify. very debate. much billions. wow