The Musk Effect: DOGE soared 10% after a widely-reported move into social media by Elon Musk.
Elon Musk again influenced the price of Dogecoin (DOGE), which soared after it was announced that the billionaire had become a shareholder of Twitter.
The CEO of Tesla and SpaceX has been associated with DOGE prices for quite some time. This is despite not being directly involved with the team behind the memecoin.
The DOGE price skyrocketed more than 10% this week. According to CoinGecko data, the coin meme peaked at $0.1570, the highest since February 13.
This time, the reason of the ‘Musk Effect’ is that Elon acquired about 10% of Twitter’s shares. The entrepreneur now owns more than 73 million shares in the company, valued at about $2.9 billion. He owns more shares than Jack Dorsey, co-founder and former CEO of the social network.
How does Musk buying Twitter shares affect the memecoin?
As in other cases, DOGE’s valuation following the announcement of Elon Musk’s investment on Twitter is something much more irrational and speculative. So far, neither the entrepreneur nor the social network have spoken out or provided information about the billionaire’s future involvement in the company’s decisions.
In addition to commenting on cryptocurrencies, he became a standout by criticizing the use of NFTs as profile pictures. He polled his followers, asking if the social network is an environment of free speech – 70% of voters said no.
The Musk Effect: The influence on the price of the asset
The Musk Effect came into being in January 2021, when he began commenting on DOGE on Twitter.
In April, the billionaire’s new tweets caused DOGE to rise 500% in just three days. The following month, he promised to talk about the cryptocurrency in his Saturday Night Live appearance, causing the asset to reach an all-time high of $0.73 before the show aired.
Despite the euphoria of the community, Musk’s mention of the memecoin on the show only managed to send the price of the meme coin down. In July, Musk changed his profile picture on Twitter, referencing DOGE – which positively influenced the price of the asset again.
Back in December, he hinted that Tesla could accept the cryptocurrency, causing its price to rise again. Although Musk still manages to influence the prices of DOGE and other cryptocurrencies, the entrepreneur has lost some of his “power” in the market, as price triggers are getting weaker and weaker.
Even with the continued support of the entrepreneur, the cryptocurrency is currently 80% below its historical price maximum. Musk still faces charges of using his influence to manipulate the market to his advantage. His company, Tesla, has already made big profits in BTC.