Taken at face value, it’s difficult not to believe that with the rise of Bitcoin (CCC:BTC-USD), we’re on the cusp of a paradigm-shifting impact for our economy and investing infrastructure. Everyday for almost the last two years, the media has been talking non-stop Bitcoin. But Dogecoin (CCC:DOGE-USD)? You might think that’s a laughing matter.
But it’s no joke, even if the underlying cryptocurrency started off as one. Sure, the community behind meme coins can be a bit rough around the edges. No one would know that better than Dogecoin co-founder Billy Markus. According to a Benzinga report, Markus requested that Twitter (NYSE:TWTR) CEO Jack Dorsey to do something about the madness.
Specifically, Markus complained about Shiba Inu (CCC:SHIB-USD) promoters who are flooding social media commentary with numerous links to an alleged SHIB airdrop. The Dogecoin co-creator tweeted, “The reason I don’t like Shib is because the community goes out of their way to harass me and insult me. That doesn’t make me think well of you or your ‘community.’”
Not only that, Markus also went after certain Dogecoin supporters, who he labeled donkeys for a more PG-appropriate wording. He added that he likes “the community a little less” following juvenile and unnecessarily vituperative actions.
However, the reality about Dogecoin is that it’s ironically a reflection of the underlying crypto complex’s maturity. That is, crypto investors no longer just have to invest in serious assets like Bitcoin. Instead, they can choose ridiculous “investments” like DOGE. And there’s plenty more where that came from.
Still, it begs the question, is the utter infantility of Dogecoin a unique phenomenon of cryptos? Given how much American education standards have fallen behind, cryptos could reflect this sorry state of affairs.
However, the truth may be even more worrying.
Dogecoin is Meme-ing Like It’s 1929
If you have a subscription to the New York Times, I highly recommend Yale professor Robert Shiller’s article, Looking Back at the First Roaring Twenties. If you don’t think that there are parallels between the current market euphoria and the events leading up to the Great Depression, Shiller’s research might convince you otherwise.
But that was back in the 1920s, I hear some of you reply. Dogecoin wouldn’t exist for almost another century. Instead, the world was just beginning to embrace the potential of centralized investment platforms.
True, the market environment wasn’t conspicuously as nutty as it is today. But perhaps that was due to the inability to peer into others’ streams of consciousness. In actuality, Shiller hints at the possibility that people back then were unchanged behaviorally as their modern counterparts.
In February 1929, singer Eddie Cantor had a hit song that went viral called I Faw Down an’ Go Boom! The lyrics included powerful lines that would make William Faulkner proud, such as “I got a tip to buy some stocks, lost my shirt, lost my socks. The minute that I buy some stocks, they faw down an’ go boom.”
Okay, I’m joking about the Faulkner part. More significantly, though, social critics at the time blasted the inanity. “Did you ever hear anything sillier, more ridiculous and inane in your life? This wisecrack is positively cuckoo, a snatch of baby talk which has swept the country,” bemoaned the Boston Globe writer Joseph Dineen.
He further added about the viral hit that “Every broadcasting station tossed it off into the air at least once a night.” You’re not going to receive that kind of fanfare unless there’s demand for it. That tells me that if Dogecoin existed in the 1920s, it may receive the same jubilation.
Nothing New Under the Sun
I bring this up not to tickle your brain with a historical parallel, though I do trust that you found the comparison fascinating. Rather, it’s to point out that there’s nothing new under the sun.
Sure, Dogecoin itself is a new “asset” trading under a novel investing framework. But while the platform itself is groundbreaking, the sentiment that drives valuation is not. We’re still dealing with human nature, something that’s likely unchanged since the beginning of civilization.
And while I’m not making any prognostications, unadulterated speculation has always led to a similar conclusion. This time might be different. But after reading Shiller’s article – and despite his own optimism – I wouldn’t count on it. At least, you want to be prepared for the possibility of a repeat performance.
On the date of publication, Josh Enomoto held a LONG position in DOGE and BTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.