Dogecoin (DOGE) soared nearly 30% Tuesday after Elon Musk agreed to acquire Twitter Inc for $44 billion, multiple news outlets reported.
The cryptocurrency featuring a Shiba Inu meme, which has long been a favorite of the centibillionaire, was up 22.14 percent to $0.162 as of 01:10 a.m. IST Tuesday, according to CoinMarketCap statistics. Twitter’s stock closed 5.6 percent higher on the day.
This development comes minutes after Musk’s Twitter takeover was made public.
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Late Monday, Twitter announced that it has reached a “definitive agreement to be bought by an entity entirely owned by Elon Musk for $54.20 per share in cash, in a transaction valued at about $44 billion.”
Once the transaction is finalized, the social media behemoth will revert to a status as a “privately held corporation.”
Recently, Musk had suggested several ways in which Twitter could be improved. (Image credit: Deadline)
In a statement on Monday, Musk said:
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.”
The Rise Of Dogecoin
Musk has been a vocal proponent of digital currencies; he recently stated that he would not sell his Dogecoin and would also retain his Bitcoin and Ether holdings.
The rise of Dogecoin, a so-called memecoin — so-called because it is mostly based on an online joke rather than a substantial blockchain project — has been spurred by the Tesla CEO.
Musk has stirred the cryptocurrency markets’ nest in the past. In February 2021, the electric vehicle manufacturer said that it had purchased $1.5 billion in Bitcoin and intended to accept it as payment, triggering a spike in both the company’s stock and the currency.
However, Musk reversed his position the following May, precipitating a decline in the value of Bitcoin and other cryptocurrencies.
DOGE total market cap at $21.56 billion on the daily chart | Source: TradingView.com
In May of the same year, his posts catapulted Dogecoin to an all-time high of 67 cents, according to Coin Metrics.
The cryptocurrency’s value frequently varies in response to celebrity endorsements like Musk, Kiss’s Gene Simmons, and rapper Snoop Dogg.
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Does It Have Real Value?
Dogecoin’s supply is unlimited, which means that as more tokens are issued, its price should theoretically drop. Mark Cuban, a billionaire entrepreneur and investor, has stated that bitcoin has “no intrinsic value.”
Jack Dorsey, Twitter’s former CEO and co-founder, left the company in November to focus on his payments startup, which rebranded to Block (from Square) to reflect greater goals in cryptocurrencies and blockchain technology.
Musk recently offered many methods to improve the microblogging site. Additionally, he urged that Dogecoin be used as a payment method on the social networking site.
Speculators have bought dogecoin because of Musk’s “obsession with the cryptocurrency,” and hence the potential for dogecoin to be given additional utility on one of the top social media networks if Elon is successful, according to Marcus Sotiriou, an analyst at digital asset broker GlobalBlock.
Featured image from CryptoHubK, chart from TradingView.com