Elon Musk hints he's a dogecoin fan because bitcoin just gives power to new rich people

• Tesla CEO Elon Musk voiced support for dogecoin again, this time in a discussion about Web3.
• He hinted he favors the meme token over bitcoin because the leading crypto only gives power to new rich people.
• Musk was responding to a Twitter conversation with Jack Dorsey, dogecoin creator Billy Markus, and others.

Elon Musk has hinted his support for dogecoin comes from the fact the meme coin is powered by a disruptive, grassroots community — unlike bitcoin, with its Wall Street establishment backers.

The Tesla CEO was weighing in on a Twitter discussion about who has power in the crypto world, carried out by bitcoin enthusiast Jack Dorsey and dogecoin creator Billy Markus, among others.

Dorsey elaborated on why he's critical of venture capital's influence on Web3, the next generation of the internet that underpins the likes of the metaverse.

The Block CEO and Twitter cofounder said while he isn't against the Ethereum blockchain, which is at the core of decentralized applications within the Web3 vision, he is opposed to corporate control.

Meanwhile, Markus said: "I mean my goal is to build stuff and make money and have fun. I'm used to the corporate establishment and don't really see any meaningful break away from it — bitcoin just gives power to new rich people."

To that, Musk responded: "That's why I'm pro Doge."

Dogecoin, a meme-inspired cryptocurrency started as a joke in 2013 by software engineers Markus and Jackson Palmer, has shot up in popularity and price this year. Its rise has been fueled by a lighthearted community that backs the altcoin as a form of disruption to Wall Street's established financial institutions.

It's similar in that to this year's Reddit-fuelled trading frenzy, which ignited heavily-shorted stocks like GameStop to send a clear message to the financial elite: power lies even with regular traders. Dogecoin is somewhat seen as a crypto-version of GameStop.

Meanwhile, bitcoin has seen considerable interest not just from retail traders, but also from institutions and other corporate heavyweights — including names like BlackRock and BNY Mellon. Dogecoin hasn't managed to capture similar backing.

Billionaire Musk — who made Newsweek's Disruptor Hall of Fame this year — has been a consistent doge advocate this year. Earlier in December, he announced Tesla would begin accepting dogecoin as payment for some of its merchandise. He first hinted in May that this could happen.

But his support for the dog-themed meme token, rather than bitcoin, also appears rooted in its usefulness.

"Bitcoin may be a store of value, but it is not a good substitute for transactional currency," Musk told Time magazine after it named him Person of the Year. "Even though it was created as a silly joke, dogecoin is better suited for transactions."

He's also joked that it could become the future of cryptocurrencies. "Fate loves irony," he told celebrity news website TMZ in May. "What would be the most ironic outcome? That the currency that was invented as a joke in fact becomes the real currency."

Although he started tweeting about it in 2019, Musk's heavy endorsements of his "fav cryptocurrency" led to a surge in the token's price this year. Dogecoin hit an all-time high of 73 cents on May 8, according to data from CoinGecko. It was trading at 17 cents per coin at last check on Thursday, and is up 3,634% year-to-date.

Musk has said that his crypto portfolio consists of bitcoin, ether, and dogecoin — "that's it."

Read More: Gen Z and millennials are expected to inherit over $60 trillion in wealth by 2050. Cowen shares 10 stocks to capture the wealth transfer — including 3 expected to surge over 70%.