Why Dogecoin Is Plummeting Today

The price of Dogecoin (CRYPTO: DOGE) is sinking on Friday. The meme coin saw its value decline 5.3% in the last 24 hours as of 11:58 p.m. ET, but was down as much as 15.3% in that time frame. The slump comes as the S&P 500 gained 0.9% and the Nasdaq Composite gained 1.1%.

Dogecoin's most prominent backer, Elon Musk, is involved in a very public spat with President Donald Trump. The tech titan appears to no longer be in the good graces of the president.

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Musk-Trump Feud

For years, Musk has been able to influence the price of Dogecoin with a tweet. His backing of Donald Trump's presidential run and subsequent place in his administration as the head of the Department of Government Efficiency (DOGE) -- so named as a not-so-subtle wink to Dogecoin -- propelled Dogecoin to heights not seen since 2021. The price more than doubled in the days following the election. Investors seemed to believe that Musk's relationship with Trump would benefit the crypto.

Image source: Getty Images.

Now, however, Musk and Trump are in the midst of a public spat, leading to Dogecoin's drop. Musk took to X to criticize Trump's flagship "Big, Beautiful Bill," calling for it to be killed off in its current form. Trump responded both on his own social media platform as well as in comments to the White House press.

Dogecoin is built on hype

Dogecoin is a meme coin. Its value is derived not from utility, but from "vibes." That makes it incredibly volatile and subject to wild swings in price. Its recent price appreciation was built entirely on the hype that surrounded Musk's place at Trump's side, so when that goes away, so too does the hype. I would not put my money in Dogecoin.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.