The connection between Elon Musk and Dogecoin: What this means for crypto users

Dogecoin is the world’s most famous meme coin whose history has Elon Musk written all over it. Dogecoin was branded in 2013 after the viral dog meme Doge. This led to a 35% increase in Dogecoin’s value after Elon Musk, Tesla‘s billionaire founder, tweeted about its prominence. He gave a nod to DOGE during his appearance in SNL in 2021. This gave the token its much-needed clout and public visibility. Musk has heavily influenced the Dogecoin price, and the connection between the two does not seem to end. Elon Musk’s involvement with DOGE goes beyond his support on social media. 

In this article, we will know more about the Musk-Doge link and what this connection means for crypto traders, investors, and gamblers.

Elon Musk’s Influence on Dogecoin

Elon Musk’s involvement with Dogecoin and his tweets on the price of DOGE have made the crypto one of the most-talked-about digital currencies in the market. Dogecoin was initially developed as a joke, but it gained traction in 2021 due to its influencer-fueled rally and meme-inspired branding. 

According to some reports, Elon Musk has been silently funding the development of DOGE since 2019, but the extent of his investment or funding is unclear. However, he has always expressed great interest and ambition to make Dogecoin a dominant crypto and upgrade its features to surpass even Bitcoin. 

His tweets have also put the crypto in the spotlight, leading to Dogecoin’s price surge in 2021. While Musk’s massive following has allowed the billionaire to reach millions of people and create a massive buzz around DOGE, his tweets have also negatively affected the coin’s price, leading to a drop in value.

A Dogecoin investor sued Musk’s SpaceX and Tesla in 2022 for $258 billion for running a pyramid scheme supporting Dogecoin that catapulted the crypto to extreme prominence.

Earlier in 2022, Musk tweeted that he would enjoy a Happy Meal if McDonald’s started accepting payments in Dogecoin. This resulted in a surge of 9% in Dogecoin price in just 24 hours. Later, Musk also posted a picture of a SpaceX rocket on Twitter with the word DOGE that shot up Dogecoin price to the moon as it rose by 44%.

How Dogecoin Survives Market Volatility

Doge’s price skyrocketed after Elon Musk tweeted about the token, proving the power of crypto users and social media in affecting crypto market trends. 

While social media and celebrity endorsements certainly help increase the value and popularity of cryptocurrencies like Dogecoin, it also comes with considerable risks. Following social media hype without proper research can result in investments in fraudulent or low-quality crypto, resulting in significant losses. Hence, it is important to invest with caution, especially in a highly volatile crypto like Dogecoin. 

The Dogecoin token gained unexpected traction largely fuelled by its connection with the internet meme featuring a Shiba Inu dog. The widespread celebrity endorsements and adoption by influential public figures such as Elon Musk have propelled the crypto to reach unimaginable heights. A strong connection between celebrity endorsements and meme culture played a pivotal role in the market value and popularity of the token. Dogecoin coin has grown out of its meme phase and has become a giant with a market capitalization of more than $10 billion and a massive ecosystem.

Dogecoin has reached various sectors, crossing geographical boundaries to become one of the most widely used crypto payment methods. Many casinos have started accepting DOGE tokens as more gamblers are willing to play their favorite games using Dogecoin. This has led to the growth of Dogecoin casinos, and we can only expect to see more platforms accepting Dogecoin tokens in the future. 

The Impact on Crypto Users

Elon Musk is considered one of the richest individuals and a technological visionary with more than 110 million followers on Twitter. Musk’s Twitter activities affect crypto traders’ returns. Many consider Dogecoin to have a Musk effect, as over 45 crypto-related Twitter events surrounding Musk have led to abnormal returns and trading volumes. However, most of these tweets have had price effects on Dogecoin, Bitcoin, or the larger crypto market. Non-negative Musk tweets have led to considerably positively absurd Bitcoin returns, which have increased BTC price by 16.9% or reduced it by 11.8%. This has affected crypto investors and traders as there is a conflict built between investor protection, morals, and the risks of market manipulation. 

There are seven good reasons why the Dogecoin crypto is considered a good investment – 

  • It is decentralized
  • It has a unique market position
  • It is convenient for daily transactions
  • It has a strong and ever-growing community 
  • It is listed on several exchanges
  • It is suitable for long-term investments 
  • It is scalable

However, Dogecoin also has a few risks or drawbacks. It has an unlimited supply, which can weigh down its price abnormally. In addition, there is a great risk of developers abandoning Dogecoin in the future, similar to before 2020. Lastly, since Dogecoin is considered a meme coin, it is often subject to a pump-and-dump policy. This means Dogecoin investment and trading always has a risk of buying into a false DOGE rally and ending up with massive losses.

Conclusion

While Elon Musk is extremely passionate about digital currencies, he has shown greater interest and support for Dogecoin. With Musk’s support and funding, the future of meme crypto looks quite promising. Once considered a meme coin, Dogecoin has gained tremendous support and credibility from influential figures in the tech industry. Moreover, Musk’s capability to disrupt the crypto industry and his presence on social media can heavily contribute to the adoption of Dogecoin. However, it must be noted that the crypto market is highly volatile, and like every form of trading, investors and traders must exercise caution and conduct thorough research before getting into the world of crypto trading.

Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

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