Feb 9, 2021 - Economy

The Musk meme economy

Illustration of a Dogecoin as the sun in a sunrise.

Illustration: Aïda Amer/Axios

Attention is a commodity, which means that memes — a way of focusing and scaling attention — are a way to create value. No one understands this better than Elon Musk.

Why it matters: People expert in propagating memes are finding that their skills can make them millions — or, in the case of Elon Musk, even billions.

Driving the news: Tesla converted $1.5 billion of its cash into bitcoin last month. When the news of the purchase became public on Monday, the value of the world's bitcoin rose by about $90 billion while the value of Tesla rose by about $8 billion.

Since Musk owns more than 20% of Tesla, his own net worth went up by well over $1 billion as a result of the announcement.

  • The price action ratified Musk's power as a memelord — someone who can focus the attention of millions on a single meme.
  • In recent weeks he has also helped to pump up the price of Dogecoin, a joke cryptocurrency with no supply constraints; there are now so many Dogecoins in circulation (almost 130 billion) that their total value exceeds $10 billion.
  • Other Dogecoin pumpers include Snoop Dogg, Gene Simmons, and social-media influencer Amanda Cerny.

Big Pump Signal, a shadowy group of cryptocurrency pump-and-dump merchants, makes up for its lack of boldface names with its sheer mass of participants. Roughly 250,000 people bid up small alt-coins when they're announced every other day, trying to buy before they peak and sell before they inevitably fall.

What to watch: If you take the logic of artificial scarcity to its ludicrous logical conclusion, you would end up with something like Birkinstocks, sandals priced at between $34,000 and $76,000 per pair that are made from destroyed Hermès Birkin bags.

  • Atlanta rap star Future managed to snag one pair before they even went on sale Monday, posing on his Instagram with footwear made from a $48,000 crocodile-skin bag.
  • MSCHF, the company behind the Birkinstocks, specializes in creating viral content that reveals the absurdity of the contemporary economy — while also making a tidy profit. Each pair of Birkinstocks costs almost double the price of the bag that it's made from, and each bag produces at least two and possibly even three pairs of shoes, depending on how big the buyers' feet are.
  • Expect a large chunk of MSCHF's profits to go towards defending the inevitable copyright-infringement lawsuit from Hermès.

The bottom line: The meme economy is where FOMO meets YOLO. Engage only with your irony dial set to 11.

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