Dogecoin Soars After Elon Musk Tweets About it Again
Dogecoin Soars After Elon Musk Tweets About it Again
Cryptocurrency Dogecoin has soared after Tesla CEO and Twitter hype man Elon Musk tweeted about it again. The soaring price is the latest example of how a single Twitter post can influence a coin’s value, and it’s an important lesson for investors looking to buy or sell cryptocurrencies in 2021.
The price of Dogecoin rose more than 30% in Monday after Musk replaced the blue bird logo on his company’s website with the Shiba Inu doge meme, which is the name of the cryptocurrency. It’s the kind of cheeky move that could be seen as an attempt to boost interest in Dogecoin, but critics say it also suggests the founder of SpaceX and Tesla is taking the coin too seriously and is trying to push its price higher.
Dogecoin is a relatively new currency that started as a joke in 2013. Co-founders Jackson Palmer and Billy Markus created it as a lighthearted alternative to Bitcoin, with playful branding that included the use of the popular internet meme.
But while Dogecoin has enjoyed a huge rise in popularity, some experts warn it is a risky investment. It is a relatively small cryptocurrency, and the value can fluctuate based on factors such as demand, celebrity endorsements and social media trends.
According to Hanna Halaburda, an associate professor of finance at NYU Stern School of Business, it’s not uncommon for the price of a crypto to move up or down by a large amount based on a single tweet. That’s because cryptocurrencies have no underlying value, so there isn’t any way to predict how the price will change over time, she says.
In contrast, traditional currencies are backed by the value of something else, such as gold or silver, and can be expected to increase in price if that value increases. It’s this stability that allows them to be used as a means of exchange and payment.
But despite its quirky origins, Dogecoin has gained significant popularity in 2021, thanks to the support of Musk and other high-profile investors. The cryptocurrency has become a popular option for online transactions, and is now considered an important part of the crypto ecosystem. Its success has been fueled by endorsements from celebrities and social media stars, as well as the fact that it has a dedicated community of supporters. The currency has also helped raise money for charity projects.