Interest in Dogecoin (DOGE) futures is experiencing a significant surge, reaching levels close to record highs observed in April. This remarkable increase is attributed to growing speculation about the potential inclusion of the cryptocurrency's acronym, D.O.G.E, in a future Republican Donald Trump administration. Over the past 24 hours, DOGE prices have surged by 15%, according to CoinGecko. This uptick followed Elon Musk's appearance at a Trump rally, and later, a social media post where he shared an image of himself with a Dogecoin avatar. Traders are suggesting that this price spike is fueled by "Trump’s popularity."
DOGE-denominated futures have risen by 33% since the previous Sunday, totaling 8 billion tokens as of Tuesday morning in Europe. This amount is just 12% shy of a lifetime record of 9 billion DOGE in open interest. In terms of stablecoin valuation, these DOGE-related bets have skyrocketed from $850 million to a remarkable $1.3 billion, based on CoinGlass data. Open Interest (OI) refers to the total count of active derivative contracts that are yet to be settled, including futures or options. An increase in open interest, especially alongside rising prices, typically indicates fresh capital entering the market, suggesting a strengthening trend, as seen on this Tuesday.
A high level of open interest can lead to increased market volatility, particularly as contracts are near expiration. This can prompt traders to quickly adjust, close, or roll over their positions, potentially causing notable price fluctuations. Elon Musk has notably developed closer ties with Donald Trump over recent months, involving increased political donations and public endorsements. On various talk shows, Musk has floated the idea of establishing a "Department of Government Efficiency," abbreviated as D.O.G.E, aimed at streamlining government spending.
Trump himself has expressed intentions to have Musk lead a "government efficiency commission" if re-elected as U.S. president, as reported by the BBC. This proposal has been seized by some traders as a near-term bullish catalyst. Influential social media personalities, such as X account @theunipcs, have noted, "Elon is turning the 'Department of Government Efficiency' into a meme-driven reality and linking it to DOGE." They suggest that a Trump election victory could trigger a more dramatic upward movement in both DOGE and the "Department of Government Efficiency" Ethereum memecoin, as it would increase the likelihood of this department's establishment.
However, @theunipcs also cautions that there could be several months between Trump's potential victory and his inauguration, as well as the actual establishment of such a department, presenting a strategic trading window. Since CoinDesk first highlighted interest in the D.O.G.E trade concept, DOGE prices have increased by over 30%, underscoring the volatility and potential strategic opportunities in this space.
