Yahoo Finance’s Brad Smith joins the Live show to explain meme coins and discuss dogecoin amid the Elon Musk Twitter takeover deal.
Video Transcript
AKIKO FUJITA: Well, Elon Musk has been making headlines this week for that purchase of Twitter. And now some think he may soon be seeing a lot more of his favorite meme coin, Dogecoin, on the platform. Let’s dive into the world of meme coins with Yahoo Finance’s Brad Smith. So, Brad, let’s start with what they are and where they come from.
BRAD SMITH: Yes, so meme coins originate from coin projects tied to pop culture typically. And they range from comedic purposes like Slap Coin– we all remember that infamous award show– to scams like Squid Coin, and then the most popular ones such as Dogecoin, which started out as an internet meme. There you go. So as of today, meme coin market cap, it’s worth $32 billion. That’s according to CoinMarketCap. And over half of that is Dogecoin, while 40% is SHIB, Shib Inu.
Now, fundamentally, the value of meme coins, they can arise when they’re listed for transaction or viable exchanges where the buying and selling can take place among a larger pool of participants. So during the summer of 2021, Coinbase pro added Shiba Inu, and the coin price moved higher by 33% on that availability and experienced similar price action after Robinhood added Shiba Inu, SHIB, in April of 2022. And the coin jumped by 20% then.
In addition, meme coins see their value rise on the announcement of some type of utilization or acceptance of the coin as a form of payment. For instance, the Dallas Mavericks. They announced in 2021 that they would accept Dogecoin for ticket purchases. Team owner Mark Cuban said at the time that the Mavericks have decided to accept Dogecoin as payment for Mavs tickets and merchandise for one very important Earth shattering reason– because we can.
Because we can, we have chosen to do so. We have chosen to do so because sometimes in business, you have to do things that are fun, engaging, and hopefully generate a lot of PR. So we will take Dogecoin today, tomorrow, and possibly forever more. And then in early 2022, you’ll remember Tesla listed a belt buckle on its online shop priced in Dogecoin, Akiko.
AKIKO FUJITA: I can never look at Shiba Inu, the actual dog, the same, after all of these conversations. But what is the significance of a meme coin like Dogecoin moving higher after a company like Twitter is acquired by Elon Musk?
BRAD SMITH: That’s a great question. And speculation here that Musk will integrate digital currency payments as a new Twitter feature. That sparked a sprint towards Dogecoin. After the announcement that Twitter would agree to be sold to the world’s richest person, Elon Musk, the crypto world swiftly reacted to the news by sending Dogecoin higher. And the Tesla founder and CEO has a popular history with the meme coin. He’s maintained this title of the Doge father. And here he is from a now infamous SNL episode during the height of the Dogecoin run. Take a look.
– And my question is, what is Dogecoin?
ELON MUSK: Glad you asked.
– It’s a good question.
ELON MUSK: Well, it’s the future of currency. It’s an unstoppable financial vehicle that’s going to take over the world.
– I get that. But what is it, man?
BRAD SMITH: He went on to say that Dogecoin was a hustle, and there, Dogecoin fell thereafter. But since then, we’ve seen it start to try and maintain some legs there. Meme coins do have a history that were being used as a form of payment in internet content creators. So this has led to that speculation that Musk will integrate digital currency payments as a new Twitter feature. And that’s where we’ve really been seeing this reaction recently, Akiko.
AKIKO FUJITA: So what goes into a meme coin transaction then?
BRAD SMITH: So I’m glad you asked that. It’s important to first know what goes into those fees, because if any of us have ordered anything on Caviar or DoorDash, we’re always asking the questions about, where are the fees coming from? So transaction fees, they’re determined by, one, how much block space would be required, two, the amount that needs to be settled, and depending upon the blockchain, the coin transaction fee can be derivative of energy necessary to approve the transaction, and three here, based on the amount of miners available to review and confirm the transaction.
In addition here, there are more confirmations required for meme coin transactions as compared to the larger digital currencies. In cases where meme coin is accepted as a form of payment for a good or service, typically a processor, such as BitPay, they may be enlisted to complete the purchase, as was the case for the Mavericks, as we were mentioning a moment ago.
AKIKO FUJITA: And naturally, Brad, in the spirit of meme coins, we went ahead and made our own. We call it the Brad coin.
BRAD SMITH: Oh!
AKIKO FUJITA: Where is it?
BRAD SMITH: Oh, is this– oh, my goodness.
AKIKO FUJITA: I feel like we could have come up with a more creative name. What do you think?
BRAD SMITH: I was actually marveling at the character that they made for you, the cartoon character that you and Brian have. So we’re going to update the Brad coin, I think, in the future. But I like this photo, too.
AKIKO FUJITA: Yeah, it’s a good start, right?
BRAD SMITH: Brad Coin. That’s where we begin, right?
AKIKO FUJITA: Question is, does it go more than the Dogecoin?
BRAD SMITH: I hope so.
AKIKO FUJITA: OK.
BRAD SMITH: It would make my self-esteem and confidence way higher–
AKIKO FUJITA: Maybe we can build on this.
BRAD SMITH: –if I was worth more than $0.15.
AKIKO FUJITA: Yeah. All right, Brad, thanks so much for that. Coming up, inflation nation.
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