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Billionaire Elon Musk is regarded as the "Father of Dogecoin". After he publicly supported Dogecoin in 2019, he created a surge in memecoins. Now it is 2023, and Musk has turned his attention to a new memecoin, Wall Street Memecoin (WSM). Traditional investors have always been confused about the value behind this thousand-fold profit. Is memecoin a pure speculation or a token with potential fundamental value? Let us lead readers to conduct due diligence and research.

Musk creates a meme coin boom: the origins of Dogecoin and Shiba Inucoin

Memecoins refer to cryptocurrencies that are derived from Internet emoticons, funny pictures, or other humorous elements. At the end of 2013, a software engineer used the Internet emoticon package Doge to issue Dogecoins as a joke, which started the craze of memecoins. Memecoins represented by "dogs" led the way, including Dogecoin and Shiba Inucoin.

Now in September 2023, according to data compiled by CoinMarketCap, there are more than 1,000 meme currencies traded on the market.

Compared with mainstream cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), the price of memecoins fluctuates. This may be due to their extreme reliance on community promotion, and their prices are often affected by the emotions of social media and online communities. This often leads to hype, accompanied by negative emotions of "fear of missing out" (FOMO) and financial trading risks. Although a few traders have made a lot of money through memecoins, it is common to lose all their money due to market fluctuations.

The surge in popularity of memecoins is inseparable from Musk's profound influence. He publicly supported Dogecoin in 2019 and continued to tweet about Dogecoin in the past four years. His tweets in January 2022 were tracked by many crypto investors. He said that if McDonald's started accepting Dogecoin as a payment method, he would eat McDonald's Happy Meal live on TV. Although McDonald's refused to accept Dogecoin payment, it did not stop traders from loving Dogecoin.

Dogecoin is decentralized according to the token model. It runs on a blockchain maintained by a network of computers, just like Bitcoin and other cryptocurrencies. However, Dogecoin uses a proof-of-work (PoW) consensus mechanism that requires a lot of computing power and energy consumption to secure the network. This has raised concerns about potential power consolidation among a few major players and centralized control of the network.

2021 is regarded as the "Year of the Dog" by the cryptocurrency market. That year, the prices of Dogecoin and Shiba Inucoin soared. Since its launch, the price of Dogecoin has soared by 10,283%. In the market value ranking of all cryptocurrencies, Dogecoin jumped to the 8th place, with a total market value of US$8.83 billion.

The emergence of memecoins has caused concerns among traditional institutions. At the end of 2021, the advertisements of the memecoin FLOKI on London public transportation caused concerns and investigations by the British Advertising Regulatory Authority, which considered it an unregulated financial product. In early 2021, the Thai Securities Regulatory Commission banned memecoins as part of its crackdown on cryptocurrencies.

What is the value behind Dogecoin’s thousand-fold profit?

Musk dropped a bombshell on the market in July, announcing that Twitter would officially change its name to X, abandoning the classic blue bird logo and replacing it with a new X logo. His vision is simple and clear, that is, to create a super application and build a comprehensive payment and financial services platform. Experts believe that Musk is trying to emulate the Chinese application WeChat, which is a Chinese instant messaging, social media and mobile payment application.

So far, X has obtained payment business licenses in seven states, including Michigan, New Hampshire, and Missouri. Given that Musk had previously connected Dogecoin payments to Tesla, allowing holders to use Dogecoin to purchase various products on the Tesla website, Dogecoin supporters began to associate a series of revolutions on Twitter with the re-launch of Dogecoin payments in X.

Musk revealed that he invested in Dogecoin in 2021, but did not disclose how many Dogecoins he purchased. There has been speculation and discussion about Musk's holdings of Dogecoin, but the specific number has not been confirmed by himself or any official sources. However, Musk's support and influence on Dogecoin has led to a $258 billion racketeering lawsuit accusing him of running a pyramid scheme to support Dogecoin.

The lawsuit came to public attention in September 2022 and claimed that Musk manipulated the price of Dogecoin by promoting it on social media and then allowing it to crash, causing investors to suffer significant financial losses. But Musk has not been successfully sued to date.

The Wall Street Journal (WSJ) revealed that tech entrepreneur Musk has been quietly funding the development of Dogecoin, according to a new biography of the SpaceX and Tesla owner published on September 12. He once joked to his brother Kimbal Musk that perhaps a Dogecoin payment system could be made.

Musk also proposed to his brother an idea to make a blockchain social media system that can be used for both payment and Twitter. Although the Wall Street Journal mentioned that Musk continued to fund the development of Dogecoin, Musk has publicly denied any relationship with the Dogecoin Foundation in the past.

Despite this, Musk's remarks still attracted the attention of Dogecoin supporters. He emphasized: "Platform X will never launch a cryptocurrency." This was interpreted by the market as a reaffirmation of support for Dogecoin and Bitcoin.

Behind this thousand-fold profit, "payment" is an important manifestation of the value of Dogecoin. Once Musk restarts Dogecoin payment, according to the original token model, Dogecoin will be able to directly empower payments on social platforms and connect to the service of exchanging legal currency.

New focus in 2023: Wall Street Meme Coin WSM

Musk has turned his attention to Wall Street Meme Coin this year. The token has raised $25 million and will be listed on first-tier exchanges at the end of September, which may stimulate the price of the coin. Musk interacted with the official account of the WSM project, expressing his appreciation and optimism for this "new generation of meme coins", which attracted widespread attention in the market.

WSM is the native token launched by the Wall Street Meme Community, which has more than 1 million members. The Wall Street Meme Community was born from the Occupy Wall Street movement in 2021. It manages multiple social media accounts and has 534,000 followers on its Instagram account. Currently, WSM is extending its influence to the cryptocurrency field through a high-profile pre-sale of its own tokens.

Looking back at this year's actions, WSM launched pre-sale on May 26, and the response was enthusiastic. In a short period of time, the pre-sale scale exceeded 25 million US dollars, reaching the project's preset hard cap. It is reported that the token price of WSM pre-sale was locked at 0.00337 US dollars, and after listing on the official exchange, the price is expected to rise dozens of times. Due to the rapid progress of the pre-sale, the team also opened a fixed price additional purchase channel to ensure that all interested investors in the community can participate.

Binance, the world's largest cryptocurrency exchange, has also announced that it will list WSM on a primary exchange after the pre-sale ends. This will undoubtedly further boost market enthusiasm. A similar case has occurred during the Dogecoin surge in 2022. After Binance went online for trading, the price of Dogecoin quickly rose from $0.05 to $0.7, a 14-fold increase. The official account of the exchange also revealed that WSM is expected to achieve a more than 70-fold increase on the first day of its launch.

Currently, WSM is still in the pre-sale stage, and investors can use mainstream currencies such as Ethereum, Binance Coin and USDT stablecoin to purchase. However, due to the community response far exceeding expectations and limited standard quota, missing this wave of pre-sales may mean losing the opportunity to obtain WSM at a super low price. After all, once the official transaction is launched, the token price will surely usher in explosive growth.

It is worth noting that as early as the beginning of the WSM pre-sale, crypto giants quietly entered the market. According to on-chain data, a mysterious wallet used 460 Ethereum coins, which was worth more than $800,000 at the time, to scan and purchase a large number of WSM tokens within 6 minutes of the start of the pre-sale. This address had previously withdrawn nearly $1 million worth of Ethereum from Binance, which can be inferred to be extraordinary. The entry of a "whale" level has undoubtedly added confidence to the WSM token and verified the long-term value of the project.

But as mentioned above, there is still great uncertainty in the investment prospects of meme coins, and the actual value behind them is still lacking. Before Dogecoin and WSM tokens are connected to any "payment" in the physical market, it is still necessary to pay attention to the fact that investment is risky. Before deciding to invest, you must fully understand the project details and do a good job of risk control.

WSM needs to be especially cautious, as any new generation of digital assets has price volatility uncertainties.