The internet community’s latest investment craze, the cryptocurrency Dogecoin, has hit a record high. The market value of all Dogecoins in circulation has risen to more than $50 billion for the first time.
By comparison, about eight weeks ago, the market influence was only around ten billion dollars.
The cryptocurrency was boosted once again by a tweet from Tesla CEO Elon Musk, who is a confessed fan of digital currencies and, for example, already accepts Bitcoin, the largest and best-known of all cryptocurrencies, as a means of payment for his Teslas. Musk posted a painting of a dog barking at the moon on April 15, captioning “Doge Barking at the Moon.” The phrase “barking at the moon” is often used to describe tremendous growth in the context of the crypto market. The tweet went viral – and the Dogecoin price exploded. So now there are even more requests for how to make a cryptocurrency. If earlier only investors with significant experience dealt with cryptocurrency issues, now everyone wants to know more about in-demand coins.
Elon Mask’s Relation to the Price of Bitcoin
Bitcoin is the oldest, best-known, and currently the most valuable of the more than 200 cyber currencies. Launched in 2009, the cyber currency hit a record $36,000 on January 6, 2021. But then another factor came into play: Elon Musk. The multi-billionaire and head of companies such as space service provider Space X and electric car maker Tesla has been increasingly vocal lately about his Cryptocurrency Twitter account. Elon Musk and his Attitude to Bitcoin:
- Musk likes to tweet. He has had a user profile on the eponymous short message service since 2009 and has sent more than 13,700 tweets. In terms of content, it’s about updates from his company and any social issues. On January 29, 2021, he posted the entry “#bitcoin” and the cyber-currency symbol in his Twitter bio, after which the exchange rate rose 20 percent to $38,406 in the following days. On February 19, 2021, he called Bitcoin a better alternative because of the low or negative interest rates on monetary currencies such as the dollar or euro.
- Bitcoin rose nearly 100 percent to $58,445 after three positive reports from the South African on the issue in 20 days. That level also marked a previous record high. But the same pattern occurred in the cyber-currency in the opposite direction when a tech innovator questioned bitcoin’s high value shortly after via Twitter. It immediately lost about twenty percent and fell below the 50,000 mark. When no more Twitter posts from Musk resulted, the cryptocurrency ended its roller coaster ride.
The Bitcointweet from January 29 can be understood as Musk’s statement: a few days later, his company Tesla announced that it had invested $1.5 billion in Bitcoin and would establish cyber-currency as an official means of payment. Investors responded, and the cryptocurrency traded at $48,004 on February 9. But the big question remains: Was Musk trying to gain an advantage for Tesla with his previous communications?
Illon Musk’s attitude to other cryptocurrencies
Elon Musk is known for sharing his life and work with the public primarily via Twitter. He sometimes does this in a rather unconventional way and doesn’t even stop at company internals. Of course, this could be more annoying for investors. With his tweets about Bitcoin, Dogecoin, and other currencies, Elon Musk always manages to move the share price.
Unlike Bitcoin, there is no limit to the number of digital coins that can be mined. When “mining,” users provide the computing power to encrypt transactions and are rewarded in the social media cryptocurrency. Because Dogecoin encryption is more straightforward, transactions can be completed faster than Bitcoin or Bitcoin.
By changing the logo, Musk caused thecryptocurrency prices of Dogecoin to skyrocket by around 20 percent to its highest level in approximately five months – at a time when Musk is already facing accusations of manipulating the price of Dogecoin. He did not provide a reason for the move. But in typical Musk fashion, he tweeted a meme that drew attention to the change.
Dogecoin has existed since 2013. Initially, the cryptocurrency with the Shiba Inu dog logo was intended as a fun currency, a parody of Bitcoin. Hence the name Dogecoin – is composed of the Internet phenomenon “Doge” (a meme with a dog photo) and “Coin,” English for coin. In the meantime, the currency is accepted as a means of payment by some companies, for example, Tesla.
Criticism around Ilonna Musk’s posts
Musk has recently commented on numerous price spikes in the financial markets viaTwitter. An example of this is the dramatic price hike by games retailer Gamestop.
In several tweets, Musk spoke against short sellers who bet on Gamestop’s falling stock price. They were the target of an initiative launched by small investors through the Reddit platform.
In addition, Musk’s tweet was blamed for the spike in the digital currency’s price, Dogecoin. Musk shared a photo from the cover of a similar-sounding magazine about dogs (“Douge”) on his Twitter page. The logo of the digital currency Doge also represents a dog. Dogecoin’s exchange rate jumped a few hundred percent on Friday.
The cryptocurrency price fluctuated strongly in the meantime but has languished at a low level of under 10 US cents since the summer of 2022. Only last October did the value of Dogecoin double again temporarily – when the takeover of Twitter by Musk was sealed.
Now there is another upward swing after Musk gave Twitter a new logo. The extent to which he profited from the price fluctuations is now to be clarified in court. On Twitter last year, he clarified: “I will continue to support Dogecoin.”
However, such an investigation will be a familiar experience for Elon Musk: he has caused controversy on Twitter. For example, when Musk speculated in 2018 about removing Tesla shares from the stock market or when he (probably) jokingly tweeted in 2020 about the bankruptcy of the most expensive car manufacturer. In the former case, the SEC fined the CEO and Tesla $20 million each. He also had to resign from the company’s board of directors and subject any Twitter posts related to Tesla to legal scrutiny before publication.
It is impossible to say unequivocally that Elon Musk has a direct connection to the change in currencies. Because some experts believe that all publications are performed by him purely intuitively, but others are sure of the opposite: all publications have their benefits. It was an investment strategy. Musk can make amarket analysis and uses some market manipulation. It helps him influence online trading.