Dogecoin Rallys After Elon Musk Tweets About It Again
In what may have looked like an April Fools’ Day prank, Twitter users noticed Monday morning that the blue bird logo of the site had been replaced by the meme coin’s Shiba Inu dog mascot. The change sparked a quick rally in the cryptocurrency, with Dogecoin rising by about 30% overnight to $0.09796. The crypto was still well below its 2021 peak, but the jump was the second time in two days that it had spiked following tweets by Musk.
The tech mogul is a longtime backer of Dogecoin, a meme-like cryptocurrency that features the internet famous dog as its mascot and has become increasingly accepted for online payments. Tesla TSLA, -2.38% and SpaceX, his companies that have their own cryptocurrency, both accept the currency for some merchandise purchases. In June, Musk tweeted a photo of his SpaceX rocket blasting off to the moon with the caption “Doge.” Celebrities including Gene Simmons and Snoop Dogg have also promoted the token.
But while Musk has helped to boost Dogecoin’s value, it’s unclear whether the cryptocurrency’s price spikes based on his Twitter musings will continue for long. The rally was short-lived, and the price fell quickly to a seven-day low of $0.119, according to CoinMarketCap.
As a large shareholder in Twitter, the CEO of both Tesla and SpaceX, and a member of its board, Musk has the ability to push for Dogecoin to be integrated into the platform. But he also has securities lawyers to answer to, and his comments can often trigger sudden sell-offs in the market.
Twitter is in the process of applying for regulatory licenses and devising the software it needs to enable payments on its site, the Financial Times reported. The company plans to launch the service using fiat currencies at first, but will have built in the capability to add crypto functionality later on.
Despite this, the upcoming launch has caused some concern in the crypto community, with many predicting that the platform’s move to use an existing cryptocurrency rather than its own could be seen as a risky experiment.
Regardless of any concerns, the potential for more uses for Dogecoin could drive further growth in the cryptocurrency. Currently, the digital currency is best known for its role in internet memes and pranks. But its broader appeal as a payment option could give it an edge over competitors. As a result, the crypto is expected to see further gains in the coming months.