Dogecoin’s Strong Rise outperforms Bitcoin Price Movement Several Times OverNovember 1, 2022
Dogecoin fans and investors had a great week with the same meme-based token reaching excellent price growth pacing. The same pacing in fact outperformed bitcoin’s rise during the same period some 17 times. During October, the dogecoin token rose around 101 percent, taking over the otherwise 7 percent rise of the general market. That includes the rise of BTC token by some 5.5 percent and ETH by 18 percent. The key element in that rebound for dogecoin is of course the Elon Musk acquisition of Twitter for 44 billion USD. A famous billionaire entered the same company and quickly decided to let go of most of its management, including the old CEO.
All of that bears little relevance to the dogecoin network directly but still managed to inject a lot of excitement into the investor community, esports forums, and other places which quickly spread the same thrills across social media, including the now Musk-operated Twitter. It goes without saying that the future of the same price rise is more than volatile and that much of the profits will not stand the test of time. While mainly the memes from this period could be something to look forward to six months from now, the rise of dogecoin is still a great measurement of the present state of the crypto market. It still might be stuck in the depths of the crypto winter, but there is a possibility that the same cold and inert period could be over sooner than more pessimistic views gauge it.
Sale of Twitter
The analysts of digital assets took very little time to state that the jump in the dogecoin price and market cap came as a direct result of the takeover of Twitter by Elon Musk. The same move was a big element for the world’s economy, being that a figure of nearly 50 billion USD changed hands. This took place in a market that is otherwise very slow and where most investors are deep inside the wait-and-see mode. But, for the chief of SpaceX, Boring Company, and Tesla, the same period showed itself as a perfect time for a massive acquisition.
The sale was celebrated throughout the cryptosphere as many believe that Musk will use the platform to experiment with digital currency features, including direct transfers between users and even more advanced elements. For a user base of over 200 million, that development would be a huge boost in user acquisition for cryptocurrencies. However, the shot in the arm for dogecoin came directly from the notion that this purchase was made by Elon Musk, a big and very vocal supporter of the entire concept of dogecoin.
The love affair between Elon Musk and dogecoin goes back several years. Musk, an avid user of Twitter, often posted a range of ideas and notions related to digital currencies. However, he was also more than willing to back that up with direct actions and activities. The problem for the wider crypto community, especially the bitcoin network, was the fact that these actions could go both ways.
For example, it was a great thing for the crypto markets to hear that Elon Musk is introducing bitcoin purchases for Tesla Motors cars, giving the network an additional boost during the height of the bull market. But, back in the mid-2021, Musk suddenly found out how proof-of-work networks actually function and decided to stop using digital currency in the context of Tesla Motors, supposedly because of environmental impact. That stopped the bull market dead in its tracks almost overnight, despite the fundamentals and the macroeconomic situation being more than positive.
The relationship between Elon Musk and the broader crypto community was always choppy at best. While ultimately it was more than useful to have a billionaire spokesperson discussing crypto, the downsides were substantial as well, just like the summer of 2021 showed. But, when it comes to dogecoin, the relationship between Musk and the community was much better and more level-headed.
In late 2021, during an appearance on the Saturday Night Live show, Musk called himself the Dogefather, which the community naturally loved. Before and after that, the billionaire also took part in many crypto-related memes and other similar activities. He even once said that as an owner of Twitter, he might consider charging 0.1 dogecoin token per tweet. While this was most likely a joke, it is still one that landed well with the dogecoin community.
Like always, it is nearly impossible to make any accurate prediction of what is coming in the next 30 days. On one hand, the macro indicators all remain in a catastrophic state with little room for optimism. For example, the war in Ukraine is dragging on and the European energy crisis is just entering the critical phase with the end of the mild autumn and the foray into true winter temperatures. The US midterm elections are also only days away and many experts believe that once they wrap up, the renaming optimism in the American economy will fizzle out. That will leave only room for a full-blown and official recession. Other nations are bound to follow, while countries like China appear to be buttoning down the hatches and preparing for a storm.
But, on the other hand, the good news is that things like the World Football Cup are nearing and the same event will see a global boost in spending. Some fringe digital tokens, including those linked to clubs and football overall, will see a jump in their value and a lot more activity. These will likely then use some of their profits to reinvest directly into marketing and promotion, which is the natural and healthy cycle for any digital currency. Dogecoin might be among these if Elon Musk continues to be a useful voice for the community. Potentially, even Twitter development might support dogecoin further. But, overall, even with the recent jump in price value, dogecoin remains tethered to an otherwise very negative cryptocurrency period and there is no apparent end to it.