He's doing it again. On Wednesday, Elon Musk tweeted something dumb about cartoon dog Scooby-Doo with the caption "Doges ftw"—the latest in his periodic efforts to get the meme coin Dogecoin trending, and goose its value in the process. His Scooby tweet did the trick as the price of Dogecoin briefly spiked 3% in 15 minutes, adding around $320 million in market cap.
We've seen this dynamic play out again and again—most famously after Musk talked up the Shiba Inu-themed token on Saturday Night Live—but it's still not clear why he's doing it. One explanation is that it's an easy way to make money since he owns a bag of Doge. If you're Musk, it's really simple: Tweet about the token, watch the price jump, and then reap some profits before doing it again a few months later. Bloomberg's Matt Levine explored Musk's motives in a column last month:
"I assumed that Musk was not doing this obvious trade. He was certainly tweeting about Dogecoin, and he had certainly bought some Dogecoin, but I just figured that he was not in fact optimizing his financial returns on the trading-plus-tweeting. He was busy running Tesla and SpaceX and the tunnel thing and probably several other companies at the time (this was pre-Twitter); his whole schtick was about building stuff, not just dumb manipulation of meaningless abstract financial markets. Still the opportunity was so obvious!"
Levine concluded that, on balance, Musk was probably not out to manipulate the market even if a group of Doge owners filed a class action suit claiming he did. Instead, Levine figured that the billionaire was probably doing what he likes to do best: troll the hell out of people.
That's probably the best guess. I dislike Musk because he's an emotional cripple with fascist leanings who is actively destroying the world's most important news platform, but I can also see the appeal of moving markets with just a tweet. On its best days, Fortune Crypto can publish a scoop that will lead to token prices jumping or falling, but it takes days of research and effort. Musk, meanwhile, can produce a $300 million gain or loss just by tweeting about Scooby-Doo. Sounds like fun.
As for why people mess with meme coins in the first place, I still don't get it. Dogecoin doesn't aspire to do anything, and its own creators say the whole thing has always been a dumb joke, yet still people buy it. Maybe it's a case of profound financial illiteracy. Or if you want a darker explanation, maybe it's because many younger Americans have concluded that growing class disparities mean they will never be able to buy a home and other middle class stuff, so they might as well gamble on Doge and meme stocks. It's hard to say.
As for Musk, even if he is manipulating the market to pocket some easy profits, that's probably not illegal. Dogecoin is an early proof-of-work coin based on the same technology as Bitcoin, and it was always going to be an uphill for battle for the SEC to prove it's a security—now, after the big Ripple ruling, that task is nigh impossible. So Musk is free to tweet doggy memes for fun or profit and, for anyone inclined to buy Dogecoin for the hell of it, knock yourselves out.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
