Elon Musk’s Dogecoin Tweeting Has Believers Barking for More

Dogecoin is named after an internet meme that surfaced nearly a decade ago. The meme centered around an image of a Shiba Inu dog with bad spelling habits (thus doge instead of dog). Users Photoshopped the dog’s furry face onto everything from astronauts to Twinkies.

In 2013, the software developer Billy Markus was watching bitcoin gain in popularity and decided to make his own lighthearted cryptocurrency. He first based it on the videogame “Animal Crossing,” and called it bells, named after the game’s pretend currency.

People online hated it, he said. So when another developer, Jackson Palmer, shared a new idea for a cryptocurrency based on the doge meme, Mr. Markus reconfigured his code for bells to fit the meme.

He set out to create a coin so ridiculous it could never be taken seriously. In return for solving mathematical puzzles, dogecoin miners operating fast-running computers received anywhere from one dogecoin to hundreds of thousands of dogecoins.

The coin had a fleeting moment of fame when it started. In 2014, its online supporters helped fund the Jamaican bobsled team’s journey to the Winter Olympics in Sochi, Russia, and sent a dogecoin Nascar racer to the Talladega Superspeedway in Alabama. Like most memes, it faded from relevance.

Then came Mr. Musk. On Jan 28, he tweeted a faux “Dogue” magazine cover.

Dogecoin surged as a topic on WallStreetBets, the Reddit forum that incubated trading in

GameStop Corp.

In late January, the price of dogecoin rose to 8 cents from half a cent, where it had traded at the beginning of the month.

The billionaire Tesla boss tweeted about it again Thursday, breaking what he said was going to be a hiatus from the social-media platform. “No highs, no lows, only Doge,” he posted. Dogecoin immediately shot up 80% intraday, before paring gains.

Dogecoin’s network, maintained by volunteers, struggled to accommodate the influx of buyers. The volunteers ponied up real money—in euros—to buy more server space.

Mr. Markus, who no longer works on dogecoin, couldn’t believe code he wrote in three hours on a Sunday gave rise to a cryptocurrency worth billions of dollars in total market value.

“The idea of dogecoin being worth 8 cents is the same as GameStop being worth $325,” said Mr. Markus, 38 years old. “It doesn’t make sense. It’s super absurd. The coin design was absurd.”

Users can buy dogecoin with a credit card on cryptocurrency exchanges and trading platforms, including Robinhood Markets Inc.

Damian Wawrzyniak, a chef at a restaurant in Peterborough, England, hadn’t heard of dogecoin before Mr. Musk tweeted about it. He quickly scooped some up through a cryptocurrency brokerage account he has used during the Covid-19 lockdown.

Dogecoin is “a completely strange name,” he said, but he figured that Mr. Musk, who has about 45 million Twitter followers, added to its allure.

In late January, a small cohort of protesters gathered in front of Robinhood’s headquarters in Menlo Park, Calif., to protest the restrictions the broker had placed on trading in GameStop,

AMC Entertainment Holdings Inc.

and other companies that were popular on Reddit.

As Dave Jevans, the chief executive of the cryptoanalytics firm CipherTrace, walked by on his way to the grocery store, a woman approached and encouraged him to join in.

“The market’s rigged,” she said.

“Buy bitcoin,” he joked to her.

“No, no, no,” she shot back excitedly. “Buy dogecoin! Have you seen it? I think we can get it to a dollar.”

A vocal group of buyers on Reddit have made it their mantra to push dogecoin to $1. The Twitter account TikTok Investors posted a video of a woman in purple workout clothes singing about taking dogecoin “to the moon.”

In theory, it will be difficult for dogecoin to hit $1. Unlike bitcoin, which caps the number that can be mined at 21 million, dogecoin has no such limit. The rise of GameStop, however, has reminded investors that anything is possible.

The newfound fervor for the cryptocurrency has even found converts who once disparaged dogecoin. Angelicah Shaver, a 28-year-old graduate student who runs a YouTube channel focused on cryptocurrencies, called it in a tweet in early January “literally an insult to the tech community” since its creation.

But as the hype grew, she decided to use it as an opportunity to teach cryptocurrency newbies how one buys, sells and analyzes coins. She bought $1,000 of dogecoin during the last week of January, right before its price shot up, and is holding on to her position.

“Fate loves irony, and it’s so true,” she said. “I’ve spoken out against dogecoin so many times. I’ve literally said dogecoin is an insult to technology, and here I am now holding this bag of doge.”

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Paul Vigna at paul.vigna@wsj.com