Dogecoin (DOGE) price rallied 15 per cent to $0.1009 on Saturday, days after Tesla chief Elon Musk acquired Twitter and fired its CEO Parag Agrawal from his post.
The rally helped the meme coin cover some of its losses from $0.2878 on October 31, 2021, to $0.1009 on October 29, 2022, Coinmarketcap data showed.
It is not the first time Elon Musk’s actions have fueled Dogecoin’s price momentum. In June 2022, Musk was sued for $258 billion in damages for allegedly running a pyramid scheme to support Dogecoin.
So, why have Elon Musk’s actions influenced Dogecoin’s price? We explore some of his comments and the corresponding price movements of Dogecoin.
Effects Of Elon Musk’s Comments On Dogecoin Price
● Last year, Elon Musk announced that people could buy Tesla and Starlink merchandise using Dogecoin. It led to a 17 per cent jump in Dogecoin’s price.
“Tesla will make some merch (merchandise) buyable with Doge & see how it goes,” Musk Tweeted in January.
● But not all Musk comments resulted in Dogecoin’s price appreciation. For example, in a US comedy show in May 2021, Musk said that Dogecoin was a “hustle” for him. The comments led to a 35 per cent drop in Dogecoin price.
● In April 2021, Elon Musk tweeted that “Doge Barking at the Moon”. His post triggered a sharp rally in Dogecoin price, up by 20 per cent in a single day.
Musk also posted numerous other cryptic Tweets about Dogecoin, Bitcoin, etc., which led to price volatility of the cryptocurrencies.
For example, in July 2022, Tesla Inc., in a letter to its shareholders, disclosed that it sold almost 75 per cent of its Bitcoin holdings, worth $936 million. Tesla, however, didn’t reveal its Dogecoin holdings.
Musk said that Tesla sold its Bitcoin at the time since it was concerned about the company’s liquidity due to Covid-related shutdowns in China, The Verge reported.
“I’m getting a Shiba Inu #resistanceisfutile,” Musk Tweeted in May 2021.
Musk also said he worked closely with Dogecoin developers to make Dogecoin more efficient. “Working with Doge devs to improve system transaction efficiency. Potentially promising,” Tweeted Musk in May 2014.
Like Bitcoin , Dogecoin works on the older proof of work consensus mechanism and requires participants to solve complicated computer equations for rewards. Dogecoin’s closest rival is Shiba Inu, but it runs on the ERC-20 framework and is hence not a cryptocurrency; instead, it is a crypto token.
