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It’s been a bad week for DOGE. And a really bad week for dogecoin.
The meme coin, which gained popularity in part because Elon Musk once dubbed it “the people’s crypto,” fell about 10% on Thursday and is down 22% over the past week. That drop corresponds with Musk’s official departure from the Trump administration and the Department of Government Efficiency (DOGE), which was the centerpiece of his effort to radically downsize the federal government.
Musk and Trump had been sparring in recent days, with Musk slamming the president’s spending bill, and Trump withdrawing the nomination of Jared Isaacman, a Musk ally, as his pick to run NASA.
But the war of words escalated dramatically on Thursday. After Trump said he was “very disappointed” in the Tesla CEO, Musk fired back on X, claiming Trump would have lost the election without his support.
Trump called Musk “CRAZY” and threatened to cancel his government contracts, sending shares of electric vehicle maker Tesla tumbling to close down 14% for the day.
Dogecoin and Tesla shares drop as Elon Musk beefs with the president.
Musk responded on X, “Go ahead, make my day.” He later said that following Trump’s comment about canceling contracts, his rocket company SpaceX “will begin decommissioning its Dragon spacecraft immediately.” Dragon is the only U.S. option for delivering crew to and from the International Space Station.
The spat wouldn’t necessarily have an impact on the price of dogecoin, which, like most meme coins, has no attached asset or underlying value. But it’s a particularly volatile coin that can move up or down based on consumer sentiment, celebrity hype, internet memes and Musk news.
Musk’s public backing of dogecoin has long been a major driver of its price, making it particularly sensitive to shifts in his political standing. The price jumped more than 15% on a single day in 2022 after Tesla began accepting the cryptocurrency as payment for some merchandise. The next year, dogecoin spiked more than 30% in a day after Musk replaced the blue bird on the Twitter (now X) website with an image of a shiba inu, the digital coin’s logo.
Dogecoin, along with bitcoin and other cryptocurrencies, soared after Trump’s election victory in November on optimism that the new administration, which was heavily backed by Musk and the crypto industry, would return the favor with friendly policies and deregulation.
Buyers of the coin are now paying the price for the Musk-Trump breakup.
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