It is not a joke. Elon Musk's acquisition of Twitter has given new life to dogecoin, the parody cryptocurrency he popularised.
After the $44 billion deal was done, the price of Dogecoin doubled. On Oct. 27, it was selling at around $0.07 before Musk tweeted "the bird is liberated" to indicate his ownership. It was $0.16 five days later.
That may not seem like much, but according to analytics platform CoinGecko, it gave the extremely volatile cryptocurrency a market worth of $21 billion.
Not bad for a coin named after an online meme of a Shiba Inu dog and launched as a "joke" satirising excessive speculation in the crypto market.
"Dogecoin trading around Elon tweets has proven profitable.""It's a sort of speculation," said Matthew Dibb, chief operating officer of Stack Funds, a Singapore-based crypto investment management.
Musk has played a significant part in the ascent of dogecoin since its playful introduction by two software developers in 2013. His tweets expressing support for the coin, including one referring to it as the "people's crypto," enabled its price come from nothing to increase about 4,000% in 2021.
According to cryptocurrency experts, the recent price increase following the Twitter transaction was fueled by investor predictions that Musk will include doge into the platform's payment system.
"There's a lot of conjecture that Twitter will serve as a testing ground for doge adoption and experimentation for various applications," Dibb noted.
Dogecoin has already given up some of its gains andaccording to CoinGecko, is hovering at $0.12, making it the eighth-largest cryptocurrency with a market worth of roughly $16 billion.
The so-called meme currency peaked at $0.63 in May of last year, but macroeconomic uncertainty and investor aversion to risky markets have since smashed it, along with other major crypto assets like bitcoin and ether. Even after the recent rebound, the doge is down 57% in the last year.
Nonetheless, Coindesk, a cryptocurrency market news website, stated that the doubling of doge's price made it the best performer among 150 digital assets in its CoinDesk Market Index in October.
Its part of the $1 trillion worldwide crypto market cap was 1% at the end of October, a fraction of the total.According to CoinMarketCap, bitcoin has a 39% market share. It is now at 1.58%.
Doge has inspired numerous dog-themed currencies, most notably Shiba Inu, which has the same pattern of the Japanese canine breed as doge and is meant to be Ethereum blockchain compatible. Shib, which trades at $0.00001, increased by one-third in the days following Musk's Twitter transaction.
Unlike bitcoin, doge and shib have nearly limitless supply, implying that price increases would need more than speculative stockpiling.
Musk's tweet last week of an image of a Shiba Inu dog wearing a Twitter T-shirt sparked speculation that he may allow crypto payments with dog tokens.
However, the initial rise has stopped, with many cryptoInvestors are perplexed as to how serious he is about dogecoin.
Musk, the world's richest person, for example, labelled dogecoin a "hustle" on a talk show in May of last year, sending the price plunging.
Then, in January of this year, Tesla began taking dogecoin as payment for its products, which included "Giga Texas" belt buckles and miniature electric car models.
Musk's recently released scent "Burnt Hair" is also available in doge.
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