- Tesla and SpaceX founder Elon Musk purchased Twitter on April 25.
- The billionaire’s enthusiasm for doge sent investors scrambling to buy the cryptocurrency.
- Will there be real dogecoin use cases implemented on the platform, or will the hype fizzle out?
On Monday afternoon Elon Musk entered an agreement to buy Twitter for $54.20 per share, valuing the social media company at approximately $44 billion. And while shares of Twitter understandably rose over 6% after the deal was announced, it may come as a surprise that Dogecoin surged as well.
Many speculate that Musk’s purchase of Twitter will transform the cryptocurrency originally created as a joke into a legitimate contender in the world of crypto, complete with some very real use cases. For instance, Musk has accepted Dogecoin payments for Tesla merchandise in the past, and has recently alluded to accepting Doge for Twitter premium services.
We asked crypto experts for their thoughts on Musk’s takeover, what it means for doge, and if there are going to be any major consequences for the crypto economy.
What is Dogecoin
Dogecoin was the fifth cryptocurrency created by software engineers Billy Markus and Jackson Palmer. Both have since left working on the project full time.
While originally intended as a joke, Dogecoin began to be taken more seriously after Musk started publicly touting the meme cryptocurrency. The price of dogecoin rose from $0.010 in January 2021 all the way to $0.44 by early May of that year, garnering thousands of headlines and attracting the attention of retail investors all over the world along the way.
During that time Musk became the unofficial, self-appointed spokesperson for the cryptocurrency. As he promoted dogecoin and tweeted about the meme crypto more and more the price of the cryptocurrency continued to rise. Things came to a head when Musk hosted SNL in mid-May, with the price of doge peaking at an all-time high of $0.74.
But in the months since, the price of doge has plummeted back down to earth and interest in the crypto has dissipated. During the week Musk went on SNL, dogecoin’s trading volume averaged $30 billion dollars, but since May 2021 there hasn’t been a day where the trading volume of doge has surpassed $5 billion.
Why doge may go up
The fates of Elon Musk and dogecoin are closely tied to one another, so it should come as no surprise that when Musk made his offer to acquire Twitter the price of doge began to rise. In the days since, the crypto community has been buzzing about dogecoin.
Insider spoke with the Bitfinex trading team, who explained that their positive outlook for Dogecoin is largely predicated on continued promotion from Musk. “Dogecoin has soared on news that Elon Musk’s bid for Twitter was successful, buoyed by a belief that Musk will continue to publicly support Doge. As Musk shows devotion to both being a social media influencer and bitcoin enthusiast, his purchase of Twitter is a bullish sign. If it achieves nothing else, it will surely bring entertainment.”
Many Dogecoin believers think that Musk’s acquisition goes beyond cheerleading, and that the meme coin will be incorporated into the social media platform. There are a variety of ways this could occur; for instance, Musk could begin accepting Dogecoin as payment for Twitter Blue — a premium service recently trialed by Twitter — or extending the Bitcoin Tipjar to accept dogecoin.
CMO of Kryptomon Tomer Nuni told Insider “Musk’s takeover of Twitter will most likely provide even more credibility to doge from both crypto enthusiasts and the general public. He aims to give it utility as an acceptable payment method on one of the biggest social networks in the world, and the most popular among the international crypto community. We will probably see it reaching the top 5 or even top 3 coins by the year’s end, placing it closer to ethereum and bitcoin.”
As for the rest of the fast-growing crypto industry, Alexis Johnson, president of Light Node Media, says that Musk’s purchase of Twitter opens the door to the integration of not just dogecoin, but of many other cryptocurrencies as well.
“Elon’s acquisition of Twitter will be beneficial for the crypto market as a whole,” Johnson told Insider via email. “He continues to express his stance and overall support for the cryptocurrency industry with great enthusiasm, so I can see him working on adding features and integrations to Twitter that will benefit crypto native users and introduce non-crypto users to crypto. Therefore I can see these features and integrations positively impacting all cryptocurrencies including Dogecoin.”
The case against doge
But not everyone in the crypto space has as optimistic of an outlook for the acquisition.
“Mimicking the Bitcoin Tipjar, or even accepting dogecoin payments isn’t sufficient for wide adoption and is not reflective of Web3 values,” Moghadam told Insider. “Users drive 100% of the value of social media companies, so if Elon wants to make a difference he will pay out a data dividend — a form of capitalist UBI — to Twitter’s unpaid labor force.”
Many crypto veterans still maintain that dogecoin is not a serious project — irrespective of the Twitter purchase. Lee Reiners, the executive director of the Global Financial Markets Center at Duke University, told Insider: “Elon Musk said what everyone already knew last year when he called dogecoin a hustle on Saturday Night Live. Buying Twitter doesn’t change this simple fact.”
It is worth noting that Musk himself urges caution when investing in crypto, tweeting “As I’ve said before, don’t bet the farm on crypto.” Moreover, Musk has a track record of flip-flopping with crypto payments: In March of 2021, Musk announced that Tesla would accept bitcoin payments only to publicly reverse that decision two months later.
Even dogecoin cofounder Markus isn’t sold on the idea that Musk will benefit the crypto. In a Twitter exchange, he told Insider he doesn’t know how the acquisition would impact dogecoin’s price, and that he wouldn’t take a seat on the board of Twitter if offered.