Dogecoin surged Tuesday night, skyrocketing over 20% after President-elect Donald Trump announced the formation of a new department focused on government efficiency, which he dubbed the “DOGE” department. In his statement, Trump named Tesla’s Elon Musk and former Republican candidate Vivek Ramaswamy as department leaders, underscoring a focus on eliminating bureaucratic inefficiencies and optimizing government expenditures.

• Dogecoin surged over 20% on Tuesday following Trump’s announcement of a new Department of Government Efficiency, or “DOGE.”

• Elon Musk and Vivek Ramaswamy will lead this department, aiming to streamline government operations.

• DOGE has surpassed XRP to become the sixth-largest cryptocurrency by market cap, reflecting renewed retail interest.

• The rally aligns with an increase in small retail wallets holding Dogecoin, while whale wallets show renewed activity.

This announcement sparked a sharp rise in Dogecoin’s value, pushing it into a postelection rally. Since election day, Dogecoin has gained 153%, while Bitcoin has risen by just 30%.

Dogecoin becomes 6th largest crypto by market cap | Source: Coinmarketcap 

Dogecoin’s price surge has propelled it to the sixth-largest cryptocurrency by market capitalization, overtaking XRP. Memecoins like Dogecoin often mirror retail interest in the crypto market, and the DOGE rally may signify a growing appetite for speculative investments among small traders.

Musk’s longstanding support for Dogecoin likely contributed to the excitement, with many speculators seeing the DOGE department as a nod to his “Dogefather” persona. This connection between crypto and political developments seems to be driving up Dogecoin’s appeal.

Trump’s DOGE Announcement | Source: ShackNews 

Trump’s announcement of the Department of Government Efficiency, referred to as “DOGE,” has created significant buzz in the crypto community, particularly among Dogecoin supporters. This department aims to streamline government processes, eliminate unnecessary bureaucracy, and cut down on excess spending. The choice of acronym—“DOGE”—immediately resonated with the crypto world, as Dogecoin is often symbolized by the Shiba Inu “Doge” meme.

The connection between Dogecoin and the DOGE department has been strengthened by the involvement of Elon Musk. Known for his playful and public support of Dogecoin, Musk has often endorsed the coin on social media, calling himself the “Dogefather” and helping propel the coin into mainstream attention. By appointing Musk as a leader in the DOGE department, Trump has effectively linked the department's goals with Musk’s persona as a champion of Dogecoin, adding weight to the connection between the two.

Musk’s presence in the department could have a dual impact: bolstering Dogecoin’s perceived value as a “people’s coin” and possibly fueling its adoption by connecting it to influential figures in government reform. For investors, this unusual tie-in between Dogecoin and government reform signals that the meme coin could benefit from continued celebrity and public support, helping maintain its relevance and potential for growth in the crypto market.

Read more: PayPal Integrates LayerZero, Trump Appoints Musk to Lead DOGE and More: Nov 13

Dogecoin daily active address vs. price | Source: Santiment 

Recent data highlights an uptick in smaller retail wallets purchasing Dogecoin. IntoTheBlock reported over 6 million Dogecoin transactions last week, the highest since February. Additionally, a rise in new wallets holding less than 100,000 DOGE signals renewed retail interest in the memecoin.

Meanwhile, larger wallets, often called “whales” and “sharks,” have shown mixed signals. Over 100 of these high-value accounts recently re-entered the market, adding strength to the rally. Santiment analytics suggest that consistent buying by both retail investors and larger holders could sustain the momentum.

DOGE/USDT price chart | Source: KuCoin 

The recent DOGE rally has reignited dreams of Dogecoin hitting $1, a psychological milestone for enthusiasts. Some analysts speculate that with the current political and celebrity backing, DOGE could reach targets between $2 and $4 in this bull market cycle. There’s even speculation of Dogecoin climbing to $30 by 2025, though this remains highly optimistic.

The rally may be further supported by technical indicators like the “golden cross” on the weekly chart, hinting at a promising outlook for the final quarter of 2024.

Read more: Top 10 Dog-Themed Memecoins to Watch in 2024

Dogecoin’s latest rise showcases the coin’s unique blend of meme power and celebrity backing, setting it apart from other assets. While its unlimited supply could limit its long-term value, Dogecoin’s recent performance suggests it may retain significant market interest if it continues to evolve.

Looking ahead, consistent support from both retail investors and whales will be critical for sustaining this upward trend. Analysts will also be watching for the impact of Musk’s role in the incoming Trump administration, as his influence could continue to propel Dogecoin’s popularity and utility.

Read more: Top Altcoins to Watch This Week as Bitcoin Breaches New High of Above $89,000