Dogecoin surges 35% as Elon Musk’s Twitter deal nears
Tesla CEO Elon Musk poses for a photo in Austin, Texas, on April 7, 2022. The electric car company has also made forays into battery storage.
Susan Cordero | AFP | Getty Images
DogecoinThe cryptocurrency labeled as a viral dog meme from 2013 is up 35% since Monday with the Elon Musk buyout. Twitter It is close to closing.
The price of the token often moves in a steady step with the comments he makes Tesla Executive Director. Doge is up 10% in the past 24 hours after the SpaceX chief changed his Twitter bio to “Chief of Twit” on Wednesday. Likewise, the meme token saw a price spike in April when Musk first came up with the idea of adding dogecoin as a payment method for Twitter’s subscription service, Blue. It also saw selling in June as Musk tried to pull back from buying.
But after a months-long battle between Musk and Twitter over the sale, all indications are that Musk has finalized the deal by the 5pm deadline on Friday. The alternative is that Musk faces trial in a Delaware courtroom.
The rising price of Dogecoin – pronounced “doje coin” with a soft “g” sound – also coincides with rumors that Twitter is building a prototype of its own crypto wallet.
Jin Manchun Wong, A A famous tech blogger known for her smart calls in space, Tweet on Monday That Twitter was “working on a ‘wallet prototype’ that would support ‘depositing and withdrawing cryptocurrencies’.”
“We don’t know what kind of cryptocurrency will be supported yet, or which network.”
Twitter hasn’t announced a crypto wallet product, but the social media company rolled out a tipping feature last year, which allows users to send bitcoins to creators via the platform. In February, Twitter added ether to its tips function.
Hosted by Elon Musk during the monologue on Saturday, May 8, 2021.
Will Heath | NBC Global
The Elon Musk effect
It is not entirely clear when and why the Dogecoin captured Elon Musk’s heart. Billionaire Tesla and CEO of SpaceX spent years Talk about the token.
Musk’s tweets, which sometimes contain slanted references to Dogecoin, often sent new record prices. These publications also helped increase the interest of retail investors.
“You have this guy who kind of looks like a cult leader,” said Asheesh Birla, general manager at Ripple, which operates an alternative cryptocurrency used for payments.
However, Musk isn’t alone in celebrity endorsements of the animal-branded brand. Dallas Mavericks owner Mark Cuban, Snoop Dogg, and Case bassist Jenny Simmons have publicly rallied behind Dogecoin in the past. Even beef jerky brand Slim Jim got into the action at some point.
Even the Doge’s price hike in 2021, which one analyst attributed to the lead-up to Musk’s Saturday Night Live on May 8, 2021, managed to Robinhood’s Crash Trading App.
But there was more to Dogecoin benchmark prices than just celebrity support. There was also a constant feeling of “sticking” to the institution.
“Dogecoin is such a big FU for the system,” said Avi Felman, Head of Trading at BlockTower Capital. “He’s like, ‘Yeah, this thing can also have value. And I’ll just buy it, because I’ll buy it. “
“Essentially Elon is pushing this message, ‘Why doesn’t Dogecoin have value?’” Felman said of Doge’s price hike in 2021. “People love these novels. They love these stories. They love these jokes. Dogecoin has captured the mind and imagination of every retail investor.”
“You have a frenzied online community,” Birla said of the evangelist’s fan base.
In 2013, software engineers Billy Marcus and Jackson Palmer launched the satirical cryptocurrency as a way to mock Bitcoin and many other cryptocurrencies that boast grand plans to take over the world.
“You have Twitter and Reddit where they kind of gather and think about how to pump Dogecoin,” Birla said.
The question of whether dogecoin holds value is debatable.
At the moment, there are very few use cases for the token. anyway More and more merchants started accepting Dogecoin as a payment method last year, and it is no longer close to the level of adoption needed to use it as any kind of actual alternative to the currency.
“These days it’s all a big marketing ploy,” Mike Buscella, general partner of BlockTower Capital, told CNBC.
Unlike competing cryptocurrencies like etherwhich allows programmers to build apps on their platform to do things like lend and borrow money, there’s not much anyone can do with dogecoin.
Dogecoin is not really a reliable store of wealth either, since this usually requires a certain degree of long-term belief in the currency and the blockchain that it is built on.
“If you look at the dogecoin protocol itself, I don’t even know if there has been anyone over the past several years who has added new functionality or tokens to it,” Birla said. There is really no development team behind Dogecoin.
Given these limitations, it seems that the increase in Dogecoin is purely guesswork. Dogecoin has value because others think it has value – and because they think someone else is willing to buy it from them at a higher price.
Disclosure: “Saturday Night Live” is a television show for NBCUniversal, the parent company of CNBC. CNBC owns the off-network cable rights to Shark Tank, which includes Mark Cuban as a panelist.
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