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Dogecoin is a crypto project that was highly influenced by Elon Musk on one side, and by the Twitter community on another side. Dogecoin prices saw a massive rise back in 2021, and even made it to the mainstream on the SNL live show. Today, Dogecoin investors are closely following the clash between Elon and Twitter regarding the acquisition. Will the Twitter acquisition affect Dogecoin? How will Elon influence DOGE prices in 2022? Let’s take a closer look at what’s been happening lately with the Doge Elon story.
What is Dogecoin crypto?
Dogecoin is one of the best-known cryptocurrencies on the market. Not because of its technical peculiarities but the project was launched as a parody of cryptocurrency to counter the hype surrounding Bitcoin and various other new cryptocurrencies with something humorous. It is an open-source cryptocurrency that is utilized by internet users globally. The structure is based on Litecoin, indicating that all developments will also be made to Dogecoin.
How did Elon Musk affect Dogecoin Prices?
Back in 2021, when Elon Musk started his crypto journey, the crypto market was already on an uptrend. This happened as prices became very cheap after the COVID-19 events that crashed markets across the world. From the equity market all the way to cryptocurrencies, everything started to pick up after severe panic selling.
Elon Musk noticed Bitcoin when prices started to rise, and more specifically midway through the Bullrun of 2020. He first started off with a few tweets, then later put the Bitcoin logo on his Twitter Bio. This happened toward the end of January 2021.
What Happened After the Very First Bitcoin Endorsement?
Following this sudden endorsement, people started buying in an uncontrollable way. They even forgot about all the technical and fundamental aspects that come with investing. Newbies started to base their investing on Elon’s Tweets. This is definitely something scary and alarming, as any sudden market adjustment would cause prices to collapse instantly – 2018 style.
The entire cryptocurrency market picked up after Elon’s endorsement. The mainstream media highlighted those events and were responsible for spreading false informations at times. Instead of talking about the technology behind cryptocurrencies and blockchains, they started to highlight high cryptos were making double-digit performances in such a short time.
Elon Musk ENDS his Crypto support
In a sudden tweet, Elon decided to abandon his Bitcoin stance. He basically claimed that Bitcoin was not eco-friendly. This news alone caused the crypto market to collapse and lose more than 80% of its value within weeks’ time. It’s kinda funny to know that Elon changed his stance, although nothing fundamentally changed in Bitcoin.
That’s why two things come to mind when thinking about this topic:
- Either Elon bought the Dip and cashed out
- Or the guy is just having fun and loves media attention
It might be a bit of both. When the famous SNL show was aired, people could clearly see how Elon appeared as a nerd seeking attention, wanting to look “cool and nerdy”. On the other hand, the show was a complete failure, as the crypto market (and specifically Dogecoin, Elon’s favorite” crashed heavily. Day traders were anticipating this big day and liquidated everything as soon as The show started.
Again, looking at both figures 1 & 2, one can’t but assume that this whole plot was carefully played to buy low and sell high. Tesla company had to disclose its Bitcoin holdings as it is a public company. For Elon Musk, he can simply buy and sell anonymously, or through other people without disclosing any of his activities.
What FUELS Dogecoin?
Now that we know how prices were heavily affected by Elon Musk’s tweets, we can certainly pinpoint two important factors that affect DOGE prices: Elon Musk and Twitter.
Earlier this year, Elon announced that he was willing to buy Twitter altogether. However, The platform is known to have a lot of bots. Bots are basically fake accounts, that spread misinformation, hype, and false opinions. This makes any topic seem famous. In the crypto community on Twitter, it is very well known that bots play a big role in influencing people’s opinions about a certain crypto project. This is what allowed rug-pulls and scammy projects to be able to prosper on the back of other people’s money.
Elon Musk Backs out of his Twitter Deal
A couple of months after his announcement, Elon Musk announced that he is calling his acquisition off. The reason behind this primarily was that Twitter failed to disclose important data, one being the number and percentage of bots on the platform. This data is key to understanding the true valuation of the platform, as one metric taken into account would be the number of active users on the platform and the number of real tweets and interactions.
Twitter decided to fight back, issuing a lawsuit against Elon for not following through on his acquisition. Elon even made a joke about it on his Twitter account.
