It isn't a joke. Elon Musk's purchase of Twitter has given dogecoin, the meme cryptocurrency he popularized, new life.
After the Tesla magnate closed the $44 billion deal, the price of Dogecoin doubled. On October 27, it was selling at roughly $0.07 when Musk announced his ownership by tweeting "the bird is liberated." It was $0.16 five days later.
That might not sound like much, but according to analytics platform CoinGecko, it gave the extremely volatile cryptocurrency a market worth of $21 billion.
Not bad for a coin named after an online meme of a Shiba Inu dog and created as a "joke" mocking the rampant speculation in the cryptocurrency market.
According to Matthew Dibb, chief operating officer of Singapore-based cryptocurrency investment manager Stack Funds, "trading dogecoin around Elon tweets has become a lucrative kind of speculation."
Since its humorous launch by two software engineers in 2013, Musk has in fact had a significant impact on dogecoin's growth. His tweets endorsing the coin, including one that referred to it as "the people's crypto," saw its price rise by approximately 4,000% in 2021, seemingly out of nowhere.
Crypto observers claimed that investor wagers that Musk will integrate doge into the platform's payment mechanism were what caused the most recent price increase, which came after the Twitter purchase.
According to Dibb, there is a lot of conjecture that Twitter will serve as a testing ground for doge adoption and experimentation for various uses.
SHIB AND DOGE
According to CoinGecko, Dogecoin is currently trading at around $0.12 and is the eighth-largest cryptocurrency with a market cap of roughly $16 billion. However, it has since given up some of its gains.
The so-called meme currency reached a high of $0.63 in May of last year, but it has since been destroyed along with other well-known crypto assets like bitcoin and ether due to macro-doom and investor apathy toward hazardous markets. Doge is down 57% over the last 12 months, notwithstanding the most recent rise.
Despite this, the 150 digital assets in the CoinDesk Market Index's best performance list for October was doge, according to the cryptocurrency market news website Coindesk.
According to CoinMarketCap, its percentage of the $1 trillion worldwide cryptocurrency market cap for the year up through the end of October was 1%, far less than bitcoin's 39%. It is currently 1.58%.
Doge has inspired several canine-themed coins, most notably Shiba Inu, which shares the same motif as doge and is built to work with the Ethereum network. Shib, which is only worth $0.00001, increased by a third in the days following Musk's completion of the Twitter transaction.
Doge and shib have nearly infinite quantities, in contrast to bitcoin, thus it would take more than just speculative hoarding to raise their prices.
AT MUSK'S MERCY?
Musk's tweet from last week featuring a photo of the Shiba Inu puppy sporting a Twitter t-shirt sparked speculation that the company may one day permit cryptocurrency payments using dog tokens.
The early gain, however, has stopped since many cryptocurrency investors are uncertain about his level of commitment to dogecoin.
For example, when Musk, the richest man in the world, referred to dogecoin as a "hustle" on a talk show in May of last year, the price of the cryptocurrency plummeted.
Then, in January of this year, Tesla began taking dogecoin in exchange for its goods, like the "Giga Texas" belt buckles and miniature electric vehicle models.
Doge can also be used to purchase the recently released fragrance "Burnt Hair" by Musk.
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