Dogecoin Spikes 10% After News of Musk's $3B Stake in Twitter
The prices of some other meme coins rose in tandem.
Dogecoin’s DOGE tokens spiked 10% on Monday as Tesla (TSLA) CEO Elon Musk was revealed to hold a 9.2% stake in social media company Twitter(TWTR), worth around $2.88 billion.
- Data shows that DOGE jumped from $0.143 to over $0.156 several minutes after the reports of Musk’s stake came out at 10:30 UTC. At the time of writing, prices fell slightly to $0.154.
- The bump had a correlated effect on some other meme coins. Shiba Inu’s SHIB jumped 5% alongside the move in DOGE.
- Musk holds more than 73.5 million Twitter shares, valued at over $2.89 billion at current prices as reported.
- Musk is one of the most famous backers of cryptocurrencies. His electric car company Tesla reportedly held over $2 billion worth of bitcoin at the end of 2021. Tesla additionally started accepting bitcoin for its cars in 2021 but later ended the project, citing climatic concerns.
- Tesla also accepts DOGE payments on its online merchandise store. The news had previously sent prices of DOGE flying 11% in January.
- “Cryptocurrencies are not companies,” Mati Greenspan, founder and CEO of Quantum Economics, said on CoinDesk TV's First Mover show on Monday. “You don't have an earnings sheet or something like that. It's basically the power of the network. And when there's a hype, the network suddenly goes stronger, because there's more attention.”
- “That basically increases the demand which increases the price,” Greenspan said. “There’s an indirect connection that can be made. If Elon Musk is somewhat steering the machine as far as the communications are concerned, he's going to take any kind of opportunity to push DOGE forward.”
- "While there seems to be no direct correlation between the Elon Musk and Twitter deal with the DOGE memecoin, the growth is a testament to the tight knitted relationship between Elon Musk and the slew of Dogecoin investors around," Alexander Mamasidikov, co-founder of mobile digital bank MinePlex.
- "Dogecoin stands to gain a lot in the near term if Musk utilizes Twitter to further promote the coin as he has been doing, however this time, without the ominous fears of being restricted. Should the buyup momentum be sustained, Dogecoin might break the $0.2 resistance in the near term," Mamasidikov added.
- Musk has previously lent support to dogecoin development and adoption. Last May, he tweeted that he was working with dogecoin developers to improve system efficiency. That sent dogecoin prices up by 22%.
- Then in June, he tweeted it was “important to support” a proposal that sought to reduce dogecoin fees – one that would make dogecoin more competitive compared to other cryptocurrencies.
UPDATE (April 5, 05:45 UTC): Adds analyst comment in eight and ninth bullet.
UPDATE (April 4, 17:35 UTC): This update reflects new comments from Mati Greenspan at Quantum Economics about the DOGE price increase.
CoinDesk's Angelique Chen contributed to this report.
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