Elon Musk offers money to help Dogecoin become ‘currency of the internet’

Elon Musk has said he will buy out major Dogecoin holders in order to help make the fringe cryptocurrency the “currency of the internet”.

The SpaceX and Tesla CEO, who overtook Amazon founder Jeff Bezos to become the world’s richest person last month, posted several tweets criticising the so-called crypto whales who hoard large stockpiles of Dogecoin.

These large holders are the only thing standing in the way of Dogecoin from becoming a mainstream currency, according to Mr Musk, who has previously suggested that the “people’s crypto” could become the official currency on Mars.

“If major Dogecoin holders sell most of their coins, it will get my full support. Too much concentration is the only real issue imo,” he tweeted.

“I will literally pay actual $ if they just void their accounts.”

Analysis of digital wallets reveals that one holder owns more than a quarter of all 128 billion Dogecoin (DOGE) tokens in circulation.

The balance of just over 36 billion Dogecoins is worth over $2 billion at today’s prices.

A further 19 digital wallets hold another 25 per cent of all Dogecoin, meaning just 20 people own more than half of all Dogecoin in existence – assuming the wallets are owned by separate individuals.

Responding to Mr Musk’s tweets, one Dogecoin advocate wrote: “Whales will have to consider Elon’s ultimatum here. If they comply, Dogecoin becomes the currency of the internet.

“If they don’t, or ‘cheat’ by distributing their coins across multiple wallets, then it loses Elon’s endorsement. Easy decision for the whales. Do the right thing.”

Mr Musk responded to this tweet by writing “Yup... Temporarily lower, long-term raise.”

The semi-anonymous nature of the cryptocurrency means it is not possible to immediately identify who the large stakeholders are, though it is known that the creators of Dogecoin cashed out their holdings several years ago before the mania really took off.

Dogecoin’s recent price surge has seen it rise in value from less than $0.01 at the start of the year to a peak of over $0.08 last week. It has since dropped back down to around $0.06 but remains the 13th most valuable cryptocurrency in the world, with a market cap close to $8 billion.

Its price has been fuelled in part by comments and memes shared by Mr Musk, whose interest in cryptocurrency was recently illustrated by Tesla’s $1.5 billion investment in the cryptocurrency.

“The most entertaining outcome is often the most likely,” he said during a recent Q&A session on the app Clubhouse. “Arguably the most entertaining outcome, and most ironic outcome, would be that Dogecoin becomes the currency of Earth in the future.”

Online vendors are increasingly accepting cryptocurrency payments but Dogecoin remains a long way off becoming a mainstream form of payment.