Musk stirs Dogecoin market sentiment again

On December 14, Tesla founder Elon Musk said on Twitter that the electric car manufacturer will accept Dogecoin (DOGE) as a payment method for some products on a test basis. As soon as the tweet came out, DOGE rose by 46.6%, becoming the “a little bit of green” in the “million red clusters” of the encrypted asset market.

The “Godfather” who stirred the Dogecoin market is back.

People call Musk the “Godfather of Dogecoin.” Only this year, the founder of Tesla, based on his personal remarks, changed the price of DogeCoin (DogeCoin), which was founded 7 years ago as a joke, from a few cents. It has increased by more than 140 times, and as a result, a Meme coin section has been formed in the currency market. Dogecoins with various animal concepts have appeared in the market with a super large circulation, pushing up the market with small and big moves. Speculation.

This time, the news that Tesla accepted Dogecoin as a payment for some of its products once again drove DOGE up again, which once again proved the emotional market characteristics of Meme coin. How long can the news-driven increase last?

Tesla will accept Dogecoin for some products

“Tesla will provide some purchaseable goods through Doge to see what the situation is.” On December 14, Tesla founder Elon Musk tweeted about the use case dynamics of DOGE.

As soon as the tweet came out, DOGE bucked the trend against the backdrop of the overall decline in the crypto asset market, rushing from around 0.15 USD to 0.22 USD, an increase of 46.6% within 2 hours, and then fell to around 0.19 USD in 4 hours.

Musk stirs Dogecoin market sentiment again

Musk said some Tesla products will support Dogecoin payment

Musk did not specify which products can be purchased with Dogecoin. Looking at the Tesla brand, the prices of its peripheral products range from US$50 to US$1,900, including clothing, belts and mini models of Tesla vehicles. Not long ago, after the release of the new Cybertruck model on December 10, the peripheral Cyberwhistle (Tesla whistle) was launched based on this model, priced at $50.

It is not known whether these Tesla peripherals support Dogecoin payments, but Musk, who has more than 66 million Twitter followers, is already well known.

According to Coingecko data, Musk’s tweets about Dogecoin, including his tweets calling Dogecoin “the people’s cryptocurrency,” helped the crypto asset soar 1,4406% in the past year. You know, the Dogecoin at the beginning of the year was only $0.0047. In May of this year, the month when Musk called the most encrypted assets, Dogecoin reached the highest price of $0.6818, but in the next 2 months. It fell to a low of $0.1728, a 74.6% drop from the historical high.

Dogecoin was first started in 2013 by programmers Billy Marcus and Jackson Palmer as a joke. They created an unlimited supply of Dogecoin in order to satirize the crazy rise of Bitcoin, which became the earliest The Meme coin, because of its low price and easy mining on the computer, is mined and held by many crypto-asset enthusiasts. It was originally used for rewards and has a strong grassroots attribute.

It can be said that until this year, Dogecoin was successfully out of the circle due to Musk’s personal preferences. Not only that, his Shiba Inu pets and pet names have become the reasons why some Meme coins appear in the crypto market, such as Shiba Inu and Floki Inu. The counterfeit versions of this type of Dogecoin are attracted by the huge circulation and low price. A large number of retail investors entered the market, speculative sentiment was strong, and the high market volatility of these Meme coins continued to pierce the bubble.

Meme coin market is still dominated by sentiment

Tesla’s acceptance of Dogecoin payments is still at the stage of Musk’s tweets. You know, this founder once said that “Tesla accepts Bitcoin as payment” and he turned back less than two months later. He believes that “Bitcoin is not a good substitute for transaction currency.”

In May of this year, Musk conducted a poll on Twitter, asking users whether they want Tesla to accept Dogecoin. Later, in a TV show, Dogecoin was a kind of “market hustle.”

The founder of the world’s largest electric car manufacturer, his repeated sentiment towards crypto assets has even begun to affect the market. After Musk later stated that Tesla would not accept Bitcoin payments, Bitcoin began to dive from the first all-time high this year. Since then, Musk has also been included in the aversion blacklist by some crypto enthusiasts.

The news that Tesla accepted Dogecoin as a payment for some of its products once again drove Dogecoin’s rise, and once again proved the emotional market characteristics of some encrypted assets, especially Meme coins.

Some cryptocurrency investors say that Dogecoin is a phenomenon similar to “memetic stocks” such as GameStop and AMC and should not be taken seriously. Brad Garlinghouse, CEO of the cryptocurrency company Ripple, said bluntly that he does not believe that Dogecoin is good for the crypto asset market.

Musk stirs Dogecoin market sentiment again

DOGE’s market volatility this year

“Meme coins such as Dogecoin are speculative assets. For this broad category of assets, sentiment is usually one of the most important price drivers.” Crypto-asset analyst Chris Macdonald said in a note that Meme coin investors It seems to pay more attention to a key driving factor, namely Internet search volume. The previous price surge of Dogecoin coincided with the surge in search volume of memecoin, and the recent drop in its price was also a manifestation of the decline in search interest.

In addition, some investors are paying more and more attention to the fundamental factors of crypto assets such as Dogecoin. Compared with other large blockchain networks, these tokens have little utility, but traders are always looking for ways to rationalize their valuations. “One indicator that investors seem to be paying attention to this weekend is the ratio of the coin’s mining revenue to the market value,” McDonald said. This year’s Dogecoin’s parabolic rise did indeed occur with the increase in mining activity. “But Maybe it’s just correlation rather than causation.”

MacDonald believes that as people’s interest in Meme coin has declined (and its search volume has fallen as evidenced by this), coupled with the fading of speculative fanaticism in the crypto industry, “Dogecoin does not seem to be on the moon.” “

Posted by:CoinYuppie,Reprinted with attribution to:
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