For some time, Musk’s high-profile acquisition of Twitter seemed to go nowhere.
But things took a surprising turn when the $44 billion acquisition was successfully completed, ending in one of Musk’s trademark nonsensical tones, and the billionaire finally lived up to his name at Twitter’s headquarters.
The Tesla boss’ takeover of Twitter has sparked a lot of discussion, including his belief in “free speech” on the internet, whether his leadership would condone certain political views, and his decision to reinstate accounts previously banned on the platform.
But Musk’s actions are influential not just in the marketplace of ideas, but in actual financial markets, most notably cryptocurrencies.
Musk’s media statements and business actions have previously affected the price of Bitcoin (BTC ), the “grandfather” of cryptocurrency.
But the crypto-token most closely associated with Musk is definitely Dogecoin (DOGE) , the Tesla billionaire who calls himself “dog daddy” has adopted a Shiba Inu himself and has always supported emoji cryptocurrencies project.
The price of DOGE more than doubled within a few days after Musk tweeted “‘Blue Bird’ released” on October 27.
This is arguably a historical trend: every time Musk mentions it, its value soars.
Musk previously stated that he would integrate this meme token into his business investment to make it practical.
Therefore, the market’s enthusiasm for Dogecoin is at least partly due to Musk’s promise.
After all, Tesla will accept Dogecoin as payment for technology products (but not vehicles) from January 2022, and SpaceX plans to launch the DOGE-1 lunar satellite soon.
Musk has previously floated the idea of using Dogecoin as a Twitter currency, using it for subscriptions, account verification and governance.
Will Dogecoin really have a bright future?
While Dogecoin has often benefited from Musk’s support, the fact that the tech billionaire is currently attracting controversy and criticism for his mismanagement of Twitter in the days following the acquisition is likely to have a detrimental effect on Dogecoin.
Musk’s credibility has been damaged by overpaying for Twitter, excessive firing of former employees, and the unpopular idea of Twitter’s “blue check” account verification.
If this trend continues, Musk’s reputation may not be the automatic “booster” of Dogecoin’s value that it has been in the past.
There are still some tricky technical issues to deal with before Dogecoin can be used as a cryptocurrency payment on Twitter.
DOGE cannot currently be integrated with smart contracts.
Is it really up to the tokens that are the basis of transactions on large platforms? Musk would have to be a die-hard meme token fan to do this.
At the end of the day, DOGE will still live and die as a meme, with social media hype and the community taking on its hilarious side.
Since then, its price has stabilized somewhat, almost back to where it was before Twitter was acquired.
It can still be a valuable asset for traders to speculate in, but until we see real progress in its integration with the twitter platform, then we should realize that its use cases are quite limited and recommend Dogecoin as a diversified portfolio Part of it, but not all of it.
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(Forex Broker)
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April 24, 2024
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