Laith Khalaf, financial analyst at AJ Bell, comments on Elon Musk’s announcement that SpaceX plans to launch satellite Doge-1 to the moon next year:
“The SpaceX Dogecoin moon mission isn’t a giant leap for cryptocurrencies, because back here on planet Earth, crypto’s long term adoption by consumers, businesses and investors remains highly uncertain, to say the least. If an asset can drop 30% on the back of one individual’s appearance on Saturday Night Live, this tells you there’s not a huge amount of fundamental value holding up its price.
“While SpaceX might accept Dogecoin as payment, those Dogecoins will have been bought by people earning money in dollars, euros and pounds, and then converting it. Until cryptocurrencies are used for things as mundane as paying your mortgage or your phone bill, or indeed receiving your wages, as a medium of exchange they simply add an extra layer to transactions, and most don’t actually perform a useful function in the real economy.
“Indeed, the process of crypto mining consumes a lot of energy, so it’s interesting to see the CEO of a company as environmentally friendly as Tesla backing cryptocurrencies so heavily. For consumers, there’s little financial harm parting with a few pounds for a bit of fun, but don’t confuse this activity with saving for your future.”
