The Best Choice of Dog Coin in the 2023 Cryptography Market?

generalizationGiven Elon Musk's love for meme coins, the DOGE bulls hope to integrate with Twitter for in app payments.Given the recent measures taken by the company, I believe this is unlikely

generalization

• Given Elon Musk's love for meme coins, the DOGE bulls hope to integrate with Twitter for in app payments.
• Given the recent measures taken by the company, I believe this is unlikely. Flash consumption has stopped. Twitter has submitted documents to the US Treasury Department.
• Regardless of Twitter, Gougou Coin itself has hardly received mainstream attention, and Robinhood user sales seem to have just begun.
• According to NVT data, compared with peers, the value of the token is still overestimated, and the activities of dog coin on the chain are less than one third of the payment of peer Litecoin.

Elon Musk and Twitter connection

The history of Elon Musk and dog coins has been recorded in detail. Tokens have largely moved in response to his actions and tweets, to the extent that Musk was actually sued for his influence on token pricing behavior. This itself should lead any serious cryptocurrency advocate to question the investment value of a coin that can move up to 20% overnight based on a person's tweet.

The recent excitement demonstrated by the rise in dog coin prices in the past few weeks largely stems from Musk's plan to integrate payments into Twitter. Musk publicly shared slides from the Twitter 2.0 platform, emphasizing the company's future initiatives. Among other things, the platform also mentioned payment for the application itself. This has led to widespread speculation that dog coins will gain some utility on social media platforms.

I have serious doubts about any implementation of Dogecoin within Twitter. Earlier this month, we discovered a significant leak related to an upcoming digital asset, which was shared by a user on the platform who found the "Twitter Coin" logo in the monetization section of the application settings. After submitting a Twitter file to the US Treasury last month, there seems to be more specific evidence indicating local Twitter payment plans.

The problem with Dogecoin bulls is that these are not actual signs that Musk specifically integrates Dogecoin into the platform. In fact, it looks exactly the opposite. It seems that 'TwitterCoin' may just be an intra app currency that can be exchanged for US dollars, that's all. Twitter has previously integrated with Bitcoin's (BTC-USD) Lightning Network to provide in app notifications, but due to inactivity, this feature has been terminated. It has been proven that after more than a year of integration, the total reward volume for this feature is only $8500. For a platform with a 9-digit user base, even if Dog Coin is integrated in some way, it is not a strong support for the encrypted tip appetite from the Twitter user base.

Is this joke outdated?

Dogcoin was created as a joke. It occupied the top 10 market value of cryptocurrencies at the beginning of its establishment, and then fell out of the top 10 in about 5 years. If you participated in the WallStreetBets/Meme stock narrative trading during the COVID lockdown, then Dogcoin may be your best choice. In many ways, DOGE is a perfect example of the financial nihilism movement that can be seen everywhere throughout Generation Z.

This is because dog coins are largely a dunk on the money itself. In April 2021, shortly before DOGE reached its peak, Vincent Ventures conducted a fascinating report on this phenomenon:

Behind the dog coin is a rebellious nihilism, which may be a dangerous idea, that is, memetic money is not more real than real money. This may be a joke, but it's a powerful joke.

The problem with any joke is when it will be staged, and I think that's what has happened to DOE since the crypto market peaked at the end of 2021. When the government prints stimulus checks and bars are closed, nihilism have a macro setting that is conducive to spending money on jokes and memes. Now we are in a very different macro environment, where interest rates are rising and printing money is said to have ended. The liquidity that helped drive the purchase of encrypted assets to the moon has disappeared. The joke of high inflation and deteriorating economic conditions is out of money. In my opinion, any marginal cryptocurrency buyer here will be assigned serious ideas that do not rely on one person's practicality.

In the above figure, we can see Google's (GOOG) trend comparison of search interest in Bitcoin, Cryptocurrency, and Dogcoin. In May 2021, the search popularity of Dogcoin actually surpassed that of cryptocurrency in a short period of time, approaching 40. In the past 12 months, Gougou Coin has not hit the previous trend index high point. If we look at the average values of different time periods, we can see that DOGE benefited from a small interest rate rebound when Musk completed the Twitter transaction in late October:

But in most cases, people's interest in dog coins is fading, and we can even see this in some wallet address data. The following figure shows the DOE balance held on Robin Hood (HOOD) in blue:

Undoubtedly, Dogecoin benefited as a meme driven by FOMO in early 2021. During the peak period of Dogecoin frenzy, FOMO held 45 billion Doges on Robinhood. It took over a year for the DOGE on Robinhood to decrease from 45 billion to 40 billion. It took less than two months to go from Robinhood's 40 billion DOGE to less than 35 billion DOGE at the time of submission. Due to Robinhood traders still holding over 26% of the total coin supply, I believe the sell-off has just begun.

Valuation and Network Usage

In order to assign a real valuation to a token that exists as a joke, I think we want to compare dogcoin with Litecoin and Bitcoin. Bitcoin and Litecoin are a viable combination because, like DOGE, they also occupy the top 20 cryptocurrencies in market value and are cryptocurrencies that focus on proof of work payment. They are close brothers and sisters. When evaluating these types of payment centric cryptocurrencies, the network value to transaction ratio or NVT ratio is a good way to evaluate when coins are cheap or expensive. The calculation method for this ratio is to divide the market value by the trading volume in US dollars on the chain.

In the past, DOGE's NVT has always been consistent with Bitcoin and Litecoin; Sometimes it's even the cheapest. You can see the difference in NVT ratios since the cryptocurrency market reached its peak in November 2021. The current 90 day average NVT ratio of Doggie Coin is 107, far ahead of 65 and 49 of Bitcoin and Litecoin. The highest NVT ratio of Dogcoin has been recorded in the past few weeks. Although the NVT of DOGE has since fallen, when we compare the current level with the low point of NVT, we see that the trading price of Dogcoin is still 8.2 times lower than the low point. This is far ahead of LTC and BTC.

Therefore, not only is Doggie Coin still trading at a very high NVT ratio, but also when the other two proof-of-work prove that the transaction of "OG" cryptocurrency is closer to the NVT low point than the NVT high point, it is also doing so. This tells us that compared to its own history and peers, the valuation of dog coins is particularly high. If more transactions start to occur on the blockchain, the ratio will definitely decrease, but I think this is unlikely. Despite the loyal followers behind the token, DOGE is not a widely held or used cryptocurrency.

The number of people holding dog coin is less than that of Litecoin. People holding dog coin use it less often than people using Bitcoin. The average transaction cost of Bitcoin is much higher. This means that Dogecoin has no purpose as a small payment currency at all, and the actual adoption rate of large payments is lower compared to Litecoin, which has a lower market value and lower NVT. The valuation of dog coins is a combination of ideas. And it seems that the future of this idea is becoming increasingly bleak.

Final idea

Due to many errors, Dogcoin is an important cryptocurrency. It has never been taken seriously, but it has sparked a huge wave, rising from a few cents in January 2021 to over 73 cents a few months later. Since then, it has sold more than 90%, but there is still a possibility of a significant decline.

And ElonMusk's affinity for the project has been maintained to a certain extent by DOGE, but after spending billions of dollars on Twitter, Musk may be more concerned about this than launching a cryptocurrency that may be popular just because the logo is cute. Whether you like him or not, I think it's unfair to say that Musk took some unwise steps during his brief Twitter operation. Companies must be more concerned about pleasing Twitter platform users and customers, rather than fulfilling the whimsical desires of small digital jewelry communities.

Given Twitter's recent decision to stop Bitcoin Flash network tipping, I believe the Twitter team is more likely to only use internal ledgers for legal based tipping, rather than trying again to use the PoW blockchain, which is not cheap to trade.