Tesla and SpaceX CEO Elon Musk has spent tens of millions of dollars to help reelect former President Donald Trump in November’s election, and that push has had an indirect downstream effect on the cryptocurrency industry.
Musk, who also owns the social media company X, is well known for being a power user on the platform. Even as his political involvement has grown over the past year, he still seems to have a soft spot for one token in particular: Dogecoin.
Musk has frequently talked about creating a so-called “Department of Government Efficiency,” or D.O.G.E, to cut back on what he deems wasteful spending and complicated regulations, which some say could create a conflict of interest for the serial entrepreneur who's frequently been in the sights of regulators.
“[I]imagine if elon starts the department of government efficiency and it just becomes a part of the government forever,” Billy Markus, the software engineer who co-created Dogecoin in 2013, said Oct. 20 in a post on X. “doge forever.”
The real-world implications of Musk’s political ambitions have already impacted the price of Dogecoin, the ninth-largest crypto with a market capitalization near $21 billion, according to The Block’s DOGE price page. Following an Oct. 18 town hall discussion hosted by Musk, DOGE jumped 15%. DOGE-denominated open interest, or the number of unsettled futures bets, spiked to over 5 billion tokens in a sign of forthcoming volatility, CoinDesk reported at the time.
While Musk isn't the only influential crypto supporter weighing in on the closely watched U.S. elections, his pronounced visibility and outspokenness could potentially impact crypto markets in the coming weeks.
“Having highly credible and influential people who understand the value of crypto from a freedom/decentralization perspective is a net good for the space, full stop,” Bitwise CIO Matt Hougan told The Block. “I don't think you can short-term ‘trade' his remarks, but I think you can own the trend.”
At an Oct. 20 town hall event, Musk spoke specifically about his favorite cryptocurrency, which he once helped send to an all-time high of $0.93 in May 2021 with his frequent tweets and endorsements of the Shiba Inu-theme memecoin.
“I’m actually not actively involved in crypto,” he said. “I make Dogecoin jokes and stuff because I just kind of like Dogecoin. Because it’s got the best sense of humor, and it has dogs and memes, and I love all those things.”
Back In May, Musk rebutted a report that said he had discussions with Trump about cryptocurrency.
“Pretty sure I’ve never discussed crypto with Trump, although I am generally in favor of things that shift power from government to the people, which crypto can do,” he said at the time, a point he echoed during the Oct. 20 town hall.
Meanwhile, Tesla began making significant bitcoin investments in 2021 and held as much as 43,000 BTC at its height. The EV maker currently holds around 11,500 BTC worth $778 million and is the third-largest public corporate bitcoin holder behind MicroStrategy and MARA.
One attendee asked Musk if he envisions the XRP Ledger being incorporated into financial institutions in the future, given the SEC’s negative stance toward crypto.
“I do think cryptocurrency is an interesting and probably valuable bulwark against a centralized control,” Muks said. “This is definitely not an endorsement or lack of endorsement for XRP, but I do think crypto, by its very nature, helps with individual freedom.”
His response was acknowledged by Ripple CEO Brad Garlinghouse, who said this is not just a niche issue for voters.
“[Voters] want real policies that drive innovation and create jobs. Candidates that ignore crypto and blockchain risk a serious loss in support from a growing, informed voter base,” Garlinghouse said in a post on X.
In a separate message, Garlinghouse said the U.S. needs to change course from the Biden and Harris administration’s “misguided war” on crypto.
"Elon's generally pro free market and anti overburdensome regulations, so I think his involvement in a Trump administration would be positive for crypto," said Joey Krug, partner with Founders Fund and cofounder of EcoYou. "You also have Tesla holding crypto on its balance sheet, SpaceX using companies like Bridge for certain types of payments, etc., so I think it'd affect crypto positively."
This past March, Musk said people would eventually be able to purchase Tesla products with Dogecoin after it began accepting bitcoin payments.
In June 2022, investors sued Musk and Tesla, claiming their activities (such as tweets) around Dogecoin had defrauded them. The class-action lawsuit was dismissed in August 2024.
"Elon has gone out of his way in the past to promote DOGE, and markets are eager to take many things he does as a positive," Ryan Gorman, partner at strategic communications and marketing firm BABs, told The Block. "In all honesty, if Trump wins, it would be surprising if Elon does not end up, at the very least, as an advisor to him on economic policy."
Gorman said such an announcement would likely see DOGE move higher in the short term, and in the longer term, he wouldn't bet against how much upside DOGE could have with Musk in government.
DOGE trades around $0.14 at publication time.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
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