Elon Musk is an entrepreneur, founder of PayPal, creator of Boring Company and SpaceX, a company trying to conquer the cosmos. He has invested in cryptocurrencies and his comments on social networks have caused the Doge and some cryptocurrencies to rise and others to fall.
There are many things to be said about this particular entrepreneur, the only thing that is certain is that he has changed the way we see the industry of private space flight, electric cars, solar energy and artificial intelligence.
Elon Musk, Social Networking and its consequences
One of the richest men in the world, who wittingly or unwittingly has caused the rise of dogecoin, GameStop, Etsy and Signal. Every time he makes a mention on his social networks, his messages tend to affect the stock market and some cryptocurrencies in a positive or negative way.
Such was the particular case of Dogecoin, which has been affected thanks to the comments of the famous entrepreneur since December. Although Elon Musk is a very busy person with his different companies, he always finds the time to shake up the markets.
At the end of 2020, his tweets started to promote certain companies and assets. Some have benefited, temporarily, such as Game Stop and craft platform Etsy.
Earlier this year he tweeted “Use signal”, in the midst of the controversial campaign against WhatsApp. This had an immediate effect and thousands of investors were interested in buying shares in the company, but Signal Advance, a biotech company, benefited, as this caused the shares to rise in value from $0.70 to $38.70. It then fell back to $2 per share. However, the company is now worth 370% more than it was before Elon Musk’s tweet.
For all this, it has received countless criticisms from some analysts and fund managers who believe that Elon Musk is injecting unexpected volatility into the market. What he is doing is not unlike the “Financial Influencers”.
Elon Musk and the World of Cryptocurrencies
In addition to mentioning some companies in his tweets, our particular entrepreneur has been mentioning cryptocurrencies on his social network Twitter, which has somehow provoked people to want to invest in cryptocurrencies as well as movements in cryptocurrency values.
In recent months he has been talking about the Dogecoin, his first mention was made on 20 December 2020, this caused a rise in the Doge reaching a market capitalisation of 10 billion dollars. This tweet came in the midst of a series of messages criticising bitcoin.
On 29 January this year, in the midst of the madness caused by GameStop, this entrepreneur put the word “Bitcoin” in his Twitter biography. “In the end, it was inevitable”, to announce a few days later that “Bitcoin is about to be widely accepted” as a payment currency.
On 4 February he tweeted again about the Dogecoin cryptocurrency, since when comments and announcements have been increasing. He even made an announcement saying he had bought it for his son.
By 8 February his company announced that it had acquired $1.5 billion, which is equal to 8% of its liquidity, in Bitcoin. This put the SEC on alert, who will investigate when Tesla made this investment, as they must check whether the company or Elon Musk has benefited financially from his tweets, as this would mean that there was market manipulation.
Although apparently, this does not represent any problem for the entrepreneur, who besides being a big fan of Bitcoin, is also a big fan of Dogecoin. Elon Musk is defined as a very particular man and has become an idol among retail investors who fight against the system.
Elon Musk and the Dogecoin Rise
In just a month and a half, Dogecoin has risen in value by 1.100% thanks to the different mentions in the tweets of the entrepreneur Elon Musk. The different mentions have produced a rise in the doge that nobody expected, by nature it should be worthless every day, but in a few months, it became one of the most profitable assets. And now he wants everyone who has this cryptocurrency to sell it, he is even willing to pay in dollars for it.
Elon Musk believes that the biggest problem with Dogecoin is that few people own the largest concentration of this cryptocurrency. Like Musk, experts claim that this could be a big problem as the Dogecoin holders could influence the price to their preference, and could drive the coin to all-time lows to sell it.
Therefore, it seems that the businessman will only continue to support Dogecoin if this situation changes. As expected, these statements caused the price to fall, reaching 34% less than its value when it reached its historical maximum.
Now it is time to wait and see if this strategy really works for Elon Musk and if those who have the most Dogecoin are willing to sell.
Although it should also be mentioned that this cryptocurrency has gained ground thanks to the support of the Reddit community, WallStreetBets and the organised groups on Discord and Twitter who have dedicated themselves to inflating the price in a coordinated manner. Of course, the most important catalyst has been Elon Musk.
Is Dogecoin worth investing in?
It is a cryptocurrency named by developer Billy Markus and cryptocurrency marketing expert Jackson Palmer, they used the image of a Shiba dog, which spread through the network and quickly became famous.
This cryptocurrency was born as a fork of Litecoin, but they have well-defined differences, as the Doge sets the resolution of the blocks in a fixed way, while Litecoin sets the resolution of the blocks in a random way. It is initially designed to be placed within a fringe project, but over time it achieved a more important role as a payment instrument and investment asset.
We should not underestimate the market capitalisations it has achieved, we must also consider that it is a virtual currency that is subject to sudden fluctuations, as we have seen in recent months, it is necessary to be prudent in these investments so that the quotes can grow over time.
So far the structure and capitalisation of Dogecoin have proved to be very interesting, some experts believe that it can become an important competitor to Bitcoin. This currency has dominated the internet for years and has been growing steadily.
Is Dogecoin’s evolution solvent compared to other cryptocurrencies of greater strength such as Bitcoin, Ethereum, Litecoin or Ripple?
Experts believe that this sudden increase, which was born as mere speculation and a gamble, may have a long way to go upwards, albeit in the short term. Dogecoin is not comparable to cryptocurrencies with cutting-edge blockchain technology such as Ripple, Litecoin or Ethereum.
Notably, the supply of Dogecoin has no built-in limit, and the amount of Doge that can be mined at any given time can vary from one to hundreds of thousands. Wallet portal Investor estimates that in the long term it could reach prices of 0.00417 by the end of 2022, 0.0441 by 2023 and 0.05096 by early 2026.
However, the interest in this cryptocurrency underlines the appetite for alternative investments, at a time when 0% interest rates prevail, as governments around the world try to mitigate the economic damage caused by the Covid-19 pandemic.
We are in a new digital age where the way we pay for goods and services has been transformed. Now in addition to credit cards, debit cards and cash we can use cryptocurrencies to pay and save.
We hope this information is helpful for everyone. And if you are looking for a new investment or savings project, Dogecoin can be a good alternative. You just need to learn where to get them and how to do it. This virtual currency can have a great reach and potential in the future. Take advantage of the opportunities, research as much as you can and get your profits by investing in cryptocurrencies.