Elon Musk’s deal to buy Twitter might be making headlines – but it’s also had a considerable impact on the cryptocurrency, Dogecoin.
The price jumped 75 per cent on October 29, 2022, making the coin’s most significant gain in one day since the height of the crypto boom in April 2021.
CoinTelegraph reported that a four-day rally worth 150 per cent gains potentially means that Dogecoin is now the most overbought cryptocurrency and could head for a sharp crash.
Part of the investment interest may be linked to Musk’s musings earlier this year when the entrepreneur speculated about making Dogecoin a payment method for premium Twitter blue-tick subscribers.
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The Twitter Deal
In a typically unconventional way, Elon Musk, Tesla CEO and SpaceX founder has acquired Twitter – one of the largest social media channels worldwide.
Musk, the wealthiest person on the planet and with a personal fortune of $216.9 billion according to Forbes, closed the deal on October 28, 2022, after months of back-and-forth, primarily fought through a war of words posted in tweets.
Last April, Musk had agreed to buy the platform for $54.20 a share but backed out and launched a legal case against the company, alleging that he had been misled about cybersecurity measures and the volume of fake accounts.
The social media giant countersued to try and force the sale.
Musk brought the legal standoff to a close only weeks before the scheduled court date, stating that he would buy, at the agreed price, on the condition that all legal proceedings were dropped.
The courts stepped in to force both parties to conclude, ordering Musk and Twitter to agree to a solution by October 28 or stand trial against each other. Nevertheless, the acquisition went ahead, worth $44 billion.
In an extraordinary series of events since Dogecoin has skyrocketed in value, Musk has laid off over 3,700 Twitter employees and sparked further contention through suggestions that he would charge high-profile account holders a monthly fee to retain their blue tick verification.
Iconic author Stephen King has even featured in this most unusual story, saying he would be ‘gone like Enron’ rather than pay $20 a month.
On the same day as the sale completed, Musk fired Twitter’s previous leadership team, including the chief executive, head of legal, policy and safety, general counsel and chief financial officer.
Twitter stocks are suspended from trading before November 8, when the company will delist and become a private company rather than a publicly traded entity.
The Link With Dogecoin
What does Twitter have to do with Dogecoin, and why has Musk’s buy-out caused a surge in DOGE demand and market values?
Ostensibly, there is no connection between the two – the link is Musk himself.
Dogecoin is a type of meme coin, a cryptocurrency token that went viral based on a dog meme. Although Dogecoin is a separate asset in a different market than Twitter, it often moves in parallel with Musk’s actions and comments.
- When Musk changed his Twitter handle to Chief Twit, the crypto climbed by ten per cent in 24 hours.
- In June 2022, when Musk tried to back out of the acquisition, DOGE experienced a reactive sell-off.
- The crypto also saw a price surge in April when Musk suggested using it as a Twitter payment method.
Rumours abound that Musk does have plans for Dogecoin and is prototyping a crypto wallet exclusively for Twitter users. However, there needs to be more clarity about whether this is correct or what crypto tokens it will support.
Musk became a Dogecoin influencer in July 2020 when he retweeted a Dogecoin meme commenting on the global financial system. He went on to make DOGE a payment method for Tesla merchandise.
In what has been called ‘the Musk effect’, the entrepreneur has been a vocal supporter of the meme coin, which was created as a joke.
No one knows how much Dogecoin Musk personally owns, although a Watcher.Guru article speculated that he may be the owner of a wallet holding 2.5 million DOGE – worth about £275,000 today.
Impacts On Musk’s Other Ventures
Musk has publicly stated that he overpaid for Twitter, a platform that made $5 billion in revenue in 2021 and no profit, compared to Meta’s $117.929 billion turnover.
However, its reach belies its relatively small stature, mostly due to prominent users such as Elon Musk and Donald Trump.
The investor has said that he expected to double revenues in three years, firing 75 per cent of staff, but they need a known pathway to do so.
Much of Musk’s business ventures rely on reputation. He is widely considered a genius, having launched ground-breaking projects through SpaceX, and achieved support by providing free Starlink satellite broadband to Ukraine throughout the Russian conflict.
Even this seemingly philanthropic gesture has sparked controversy, where Musk suggested he could no longer afford to keep the Starlink satellites live and then swiftly backpedalled.
With a reputation bolstered by Tesla, Musk has proved that he can pull the company out of threatened bankruptcy, revolutionise the EV car market, and make environmentalism cool.
Tesla share prices have continued to surge, helping Musk to overtake Jeff Bezos as the wealthiest person alive, but with Musk selling $15.3 billion of his Tesla ownership to finance the Twitter buy-out, things may change here too.
Stocks of Tesla Inc are currently worth $219.34, a slight drop from $228.52 on the day of the Twitter acquisition.
SpaceX is another consideration, but investors doubt that the distractions of Twitter will have any tangible impact, given that the multi-billionaire already divides his attention between his various shareholdings, board seats and CEO positions.
Musk’s role at Twitter is expected to be changeable, and once he appoints a management team of his choosing, it may be back to business as usual, including planning to build a staffed base on Mars, with a view to creating a colony.
The aerospace company features a quote from Musk on its home page, stating his vision for a ‘spacefaring civilisation’. But, if we have learned anything from the Twitter debacle, Musk is prone to making off-the-cuff comments that turn out to be real.
Dogecoin Soars 60 Per Cent On Musk Completing Twitter Deal FAQ
What happened to Dogecoin prices when Elon Musk bought Twitter?
When Musk’s Twitter acquisition was completed, the Dogecoin price climbed over 60 per cent, although it has since dropped slightly.
The rally was linked to speculation that Musk intended to integrate the meme coin with the Twitter platform, which he is a vocal supporter of.
Musk tweeted a picture of a Shibu Inu dog wearing a Twitter-branded t-shirt, linking his favourite cryptocurrency with his newly owned social media platform, further fuelling excitement.
However, on November 4, Platformer published an article claiming that the crypto wallet project has paused, causing DOGE to drop 10 per cent in response.
How is Elon Musk connected to Dogecoin?
The Tesla CEO and viral meme maker originally tweeted about Dogecoin in 2020 and has since endorsed the cryptocurrency, using it as a payments system on the Tesla merchandise store.
Musk is not involved in Dogecoin but is thought to have invested in the meme coin. Doge was created by Billy Markus and Jackson Palmer, both software engineers.
Palmer said Musk had supported Dogecoin purely for his benefit and that he finds the association ‘annoying’.
In a report published by Insider, Palmer is said to have deleted all social media accounts following a series of direct tweets sent by Musk claiming that Tesla programmers could code to a higher skill level.
Will Twitter be associated with Dogecoin?
Given the chaos around the Twitter acquisition, delisting from the stock exchange and firing of all the senior management team, including the General Counsel who oversaw Twitter’s counter-legal claim against Musk, much is still up in the air.
There are suggestions that Musk is launching a development programme to create a Twitter crypto wallet, but counterclaims that the plans have been suspended.
This is not the first time Musk has tried to coordinate his interests – he plans to launch a themed Doge-1 satellite mission as part of a moon landing voyage in January 2023, named after his favourite cryptocurrency.
Is now a good time to buy Dogecoin?
Cryptocurrency is always a volatile investment, but most crypto analysts guess that DOGE will be worth more in a couple of years than now.
Of course, it may sink back below previous lows and has been affected by the gloomy crypto markets in 2022. It remains precarious, with prices impacted by as much as 60 per cent by one tweet.
How much did Elon Musk pay for Twitter?
The fraught and highly publicised deal was completed in October 2022, worth $44 billion, prompting Musk to fire every top executive immediately.
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