Elon Musk, the billionaire known for his ventures in space and electric cars, has had a well-documented fondness for Dogecoin (DOGE). Back in 2019, he even revealed it as his favorite cryptocurrency.

Over the years, Musk’s tweets and public actions have often triggered significant surges in Dogecoin’s price. Perhaps the most dramatic rally, pushing DOGE to its all-time high of $0.7316, occurred around the time he hosted Saturday Night Live (SNL).

Interestingly, Dogecoin also saw a positive reaction following Donald Trump’s re-election. This surge was considered related to Elon Musk’s support for the Republican party and his anticipated involvement in the new administration.

Between November 5th and December 19th, just before a significant market correction, DOGE experienced a remarkable 174.12% rally, jumping from $0.17 to $0.47. This price surge also resulted in a 40% increase in the number of Dogecoin millionaires by November 7th.

DOGE records massive losses in 2025

However, the second Trump presidency has proven to be far less favorable for Dogecoin, and indeed for much of the cryptocurrency and stock markets, compared to the bullish period following his earlier election victory.

Since inauguration day on January 20th, DOGE has plummeted by 51.43%, falling from $0.35 to $0.17. This downturn mirrors a broader trend across various assets, sparking speculation about a potential recession in the U.S.

While broader market uncertainties linked to Trump’s tariff policies and strong rhetoric are often cited, Dogecoin’s particularly sharp decline may be more directly connected to Elon Musk himself.

Is Musk to blame for Dogecoin’s collapse?

Delving deeper into the connection, upon the Republicans’ return to the White House, Elon Musk was appointed as head of a new government department: the Department of Government Efficiency – cleverly abbreviated as D.O.G.E., or simply DOGE, depending on how you look at it.

The Department’s mission, aimed at curbing government spending to address the mounting national debt, is viewed positively by many Americans as a necessary step. However, its implementation has been far from smooth and has sparked considerable controversy.

D.O.G.E. has already faced scrutiny for several missteps in its execution, particularly in employee dismissals. A prime example is the hasty firing and subsequent rehiring of hundreds of nuclear engineers – personnel crucial to America’s nuclear capabilities.

Adding to the issues, the Department’s operations are also under a cloud of privacy and security concerns. Furthermore, numerous news outlets claim that D.O.G.E. is significantly exaggerating its reported savings, raising questions about transparency and accountability.

While these departmental mishaps aren’t directly tied to Dogecoin itself, another asset strongly associated with Musk – arguably even more so than the meme coin – is facing significant repercussions: Tesla (NASDAQ: TSLA).

As a direct consequence of Musk’s actions and public statements in his governmental role, Tesla vehicles have become targets of vandalism and consumer boycotts. This negative sentiment is mirrored in the stock market, with TSLA shares plummeting 41.52% since January 20th, reaching $249.42 by March 14th.

It’s highly probable that this similar wave of negative sentiment and association with Musk’s controversial actions has played a significant role in Dogecoin’s own price downturn.

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