The dogecoin mania is back.
Dogecoin has overtaken the market over the past seven days, spurred by billionaire Elon Musk’s acquisition of Twitter. On Oct. 25, Musk told his backers that he planned to finalize the purchase of the social networking giant by the end of the week. Coupled with a broader rally in the crypto-currency market, the news sent the price of Dogecoin up 36 percent as of Friday’s acquisition date.
However, it wasn’t until the weekend that the real fireworks began. Less than 24 hours after Musk officially took control of Twitter and fired several of the company’s top executives, Dogecoin began a new rise. The Shiba Inu-themed coin gained another 87.5 percent, rising from around $0.08 on Friday to a high of $0.15 on Tuesday morning, before a slight dip.
To the uninitiated, it may seem coincidental that Dogecoin has rallied so much with Musk’s takeover of Twitter. However, the Tesla and SpaceX CEO has a long-standing connection to the meme currency that dates back to early 2021. Musk was instrumental in Dogecoin’s surge to an all-time high of $0.73 on May 8, thanks to multiple tweets, a stock buyback and a rise in the value of Dogecoin. Saturday Night Live and revealing that he had personally invested in the meme currency.
Musk’s affinity for Dogecoin continued in 2022 when he announced that Tesla would begin allowing customers to purchase goods using DOGE. However, what got Dogecoin enthusiasts excited this time around were some comments Musk made during a conversation with former Twitter CEO Jack Dorsey about how to help decentralize and combat bots on the social media site.
Last month, a document containing several of Musk’s conversations about his purchase of Twitter was introduced as evidence in Musk’s lawsuit with Twitter. Several of Musk’s comments allude to creating or modifying Twitter to make it more decentralized or various ways to combat the endemic bot problem on the site. It should be noted that exchange where Musk details a “blockchain-based version of Twitter where ‘tweets’ are embedded in the transaction as comments.“In this plan, Musk also floats the idea of charging 0.1 DOGE per comment or repost.
Here, Elon Musk details his “Plan B,” also chatting with SBF.
“My Plan B is a blockchain-based version of twitter, where the “tweets” are embedded in the
transaction as comments. So you’d have to pay maybe 0.1 Doge per comment or repost of
SBF links a tweet: https://t.co/Tg9OzxdXlm pic.twitter.com/Ub2vKqEf84
– 👨🍳.eth (@CroissantEth) October 31, 2022
Now that Musk has taken control of Twitter, speculation that he will integrate Dogecoin into the social media platform is reaching a fever pitch. Seeing the meme coin mania unfold, it seems Musk has returned to his 2021 tactic of posting cryptic Dogecoin-related tweets, adding even more fuel to the fire. On Monday night, Musk tweeted a photo of a Shiba Inu wearing a t-shirt with the Twitter logo. In response, Dogecoin had gained another 23% the next morning.
– Elon Musk (@elonmusk) November 1, 2022
Is Dogecoin running out of steam?
After such a surge in the price of Dogecoin, investors and observers are starting to wonder how far the meme currency can go. Now that the main event has passed with Musk finalizing the deal with Twitter, the Dogecoin rally seems to be slowing down.
Posting pictures of Shiba Inu dogs on Twitter is bound to spur buyers a number of times – at some point, those speculating on DOGE will start to tire of Musk’s cryptic messages. Still, many expect a final push higher if and when Musk reveals what he has planned for his favorite crypto asset in relation to Twitter.
Paradoxically, Musk’s continued hints of a Twitter Dogecoin connection could be a bullish scenario. Continuing his “Dogeposting“Cryptic, Musk is letting speculators’ imaginations run wild, further detaching Dogecoin’s value from any fundamentals. Once the spell is broken – whether by good news or bad – investors will likely lose interest and take their short-term profits, as the suspense has been broken.
However, whether the current DOGE rally continues for another month or fades tomorrow, this episode has revealed valuable information about Dogecoin and Musk’s relationship with it. It’s clear that the tech billionaire will continue to tout his favorite crypto asset unless regulators like the SEC intervene. If Dogecoin can double in value in less than a week in today’s tough macroeconomic conditions, imagine how much speculative mania could push it higher in a true bull run.