The influence of celebrities like Musk on cryptocurrencies is essentially a special phenomenon in the early development stage of the blockchain industry. This 'celebrity effect' may continue in the short term, but in the long term, it will face multiple challenges, and its sustainability depends on the maturity of the market, project fundamentals, and changes in the regulatory environment.
I. Short-term driving logic of celebrity effect
Traffic and attention economy
Public figures like Musk create topics through social media, attracting retail investors. For example, every time Musk mentions Dogecoin, it triggers significant price fluctuations (e.g., in November 2024, Dogecoin surged over 50% in a single day due to Trump's election victory and the 'DOGE department' proposal). This traffic monetization model is especially effective in an era of fragmented information.
Retail speculation psychology
A large number of retail investors in the cryptocurrency market lack professional analytical capabilities and tend to follow the actions of 'opinion leaders'. The surge in Dogecoin (e.g., a 250% increase in 2024) primarily stems from such speculative behavior, rather than actual value support.
II. Limitations and potential risks of celebrity effect
Lack of fundamental support
Dogecoin is essentially a 'joke coin' with no clear application scenario (only 2,315 businesses worldwide accept it as payment), and its supply is unlimited (increasing by 5% annually), raising doubts about its long-term value. Historically, it has experienced multiple crashes due to Musk's 'bearish' comments (e.g., when he referred to it as a 'scam' in a May 2021 program, the price halved).
Regulatory and policy uncertainty
Although the Trump administration supports cryptocurrencies, if future policies shift towards strict regulation (e.g., cracking down on market manipulation), the celebrity effect may become ineffective. For example, if the SEC strengthens scrutiny of cryptocurrencies in 2025, it could marginalize assets like Dogecoin that lack compliance.
Market differentiation and technological iteration
The blockchain industry is transitioning from the 'speculation era' to the 'value era'. Mainstream currencies like Bitcoin and Ethereum have long-term support due to technological innovations (e.g., smart contracts, Layer 2) and institutional holdings (e.g., MicroStrategy), while the speculative nature of meme coins like Dogecoin may be gradually discarded by the market.
III. Future direction of celebrity effect
Short-term: still explosive
Under favorable policies (e.g., Trump's cancellation of capital gains tax on altcoins) or technological breakthroughs (e.g., integration of crypto wallets on platform X), the celebrity effect may continue to spur short-term market movements. For example, if Musk promotes DOGE as a symbolic asset for the 'Government Efficiency Department', it could trigger a new wave of speculation.
Long-term: gradually weakening
- Institutional dominance in the market: As Bitcoin spot ETFs are approved and traditional financial institutions enter, market pricing power will shift from celebrities to professional investors, reducing speculative demand.
- User maturity improvement: Retail investors, after experiencing multiple 'roller coasters' (such as Dogecoin's 80% crash in 2021), may pay more attention to project fundamentals and reduce blind following.
- Improved regulatory framework: Global regulations on cryptocurrencies are tightening (e.g., the U.S. plans to legislate on celebrity promotion behaviors), limiting the space for 'pump and dump' market manipulation.
Conclusion: From 'wealth creation myth' to 'value return'
The celebrity effect will still exist in the blockchain industry, but its role will gradually weaken. The future development of cryptocurrencies will rely more on technological innovation (e.g., the combination of AI and blockchain), the compliance process (e.g., spot ETFs, regulatory sandboxes), and practical application implementation (e.g., Web 3.0, DeFi). Investors need to be wary of the bubbles under the 'celebrity halo' and focus on projects with long-term value support.
