Elon Musk Effect: The Rise and Fall of Dogecoin

In anticipation of Elon Musk’s appearance on Saturday Night Live, the meme cryptocurrency Dogecoin jumped in price by a third, before plummeting 40%.

On May 8, DOGE rose to $0.7 on investors’ expectations for Elon Musk’s words about the meme cryptocurrency. They were not wrong: Musk did mention DOGE during his appearance on Saturday Night Live.

At the end of the show, Musk’s mother, supermodel Maye Musk, appeared at the end of her Tesla CEO son’s SNL monologue to ask what he got her for Mother’s Day.

“I’m excited for my Mother’s Day gift,” Maye Musk said. “I just hope it’s not dogecoin!”

“It is,” Elon Musk said. “It sure is.”

Since January, DOGE jumped more than 12,000% in value thanks in large part to Musk’s tweets. In May alone, the cryptocurrency rose in price by 9-fold. Launched as a joke in 2013, it is now the fifth largest cryptocurrency in the world with a market cap of just under $70 billion.

Musk’s tweets became perhaps the main growth driver for Dogecoin. In April, Musk tweeted “Doge Barking at the Moon”, attaching Catalan artist João Miró’s painting “A Dog Barks at the Moon” to his tweet.

SpaceX books a mission to the moon funded entirely by Dogecoin. Geometric Energy Corp. has planned a rideshare mission to the moon aboard a SpaceX Falcon 9 rocket. The mission, which is set to launch in the first quarter of 2022, follows an announcement Musk made April 1 promising to put Dogecoin “on the literal moon.”

After Musk’s performance on the show, Dogecoin plummeted 40% to $0.4. It is not clear what led to the sale of Dogecoin. Investors may have expected Musk’s louder statements. But it is possible that investors followed a buy-on-rumor and sell-on-news strategy, trying to capitalize on investors’ predictions that came true through high sales.

Via: 2Coinfox.info

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