Published: April 5th, 2023
Dogecoin’s price rallied this week after the token’s canine icon was used by Twitter in a novel twist.
Instead of the blue tweeting bird icon, users of the social media network saw DOGE’s Shiba Inu mascot displayed on their timelines.
It caused a minor internet sensation and sent the token’s price skyward as people became aware of the reference. Numbers from CoinGecko show that DOGE spiked by more than 20 per cent to around USD 0.098 on Tuesday, 4th April. The rise took less than an hour, taking Dogecoin to its highest price in 30 days. At time of writing the price had slipped back slightly to USD 0.097.
Shortly after the icon switch, twitter CEO Elon Musk tweeted an image acknowledging the move.
All of this is happening as a legal drama unfolds. Musk asked a Manhattan court last week to dismiss a USD 250 billion lawsuit that alleges he ran a pyramid scheme using electric car company Tesla. The suit claims he used his influence and celebrity to artificially pump up the price of DOGE. Musk’s lawyers say the suit is a ‘work of fiction.’
‘There is nothing illegal about tweeting funny pictures of a legitimate cryptocurrency, particularly one with a market capitalization of close to USD 10 billion,’ says Musk’s motion to dismiss.
The bird-to-dog icon swap is just the latest incident in an evolving relationship between Musk and the meme-coin.
Tesla has acknowledged significant holdings of DOGE (and BTC) in the past. The company said it had liquidated three quarters of its Bitcoin hoard in late 2022, but Musk told investors in subsequent earnings call that Tesla’s Dogecoin holdings were intact. ‘We still have it.’
With the arrival of Elon Musk as Twitter’s new owner in October last year, Dogecoin’s fortunes seemed tied to the Tesla billionaire’s business dealings.
DOGE went into an extended rally post-purchase, doubling in value for a brief period to nearly (USD) 15 cents on Monday 31st October. The price fell back somewhat to USD 0.01418 cents, but that still left it up 94% over the previous seven days.
Even then, Musk’s outsized influence on DOGE’s price wasn’t a new phenomenon, but the coin burst out of a crypto bear market to reach prices not seen since Spring. Musk kept quiet about Dogecoin in the immediate aftermath of his USD 44 billion purchase of Twitter, but he was responding to tweets from Billy Markus, one of Dogecoins developers, regularly on the social network.
CoinGecko tracked Dogecoin’s total value then at around USD 15.8 billion, up from USD 8 billion and pushing it past the market cap of more ‘legitimate’ coins like Solana and Cardano. That made it the eighth largest crypto by market cap.
The coin also saw heavy trading on the major cryptocurrency exchanges after the buyout, with volumes of over USD 300 million conducted between Monday 31st October and Tuesday 1st November. On Coinbase DOGE became the third most traded coin, accounting for over 14 per cent of the exchange’s total trading volume.
Trades on Binance, trades between DOGE and stablecoin Tether amounted to USD 1.8 billion in the same period, totaling 10 per cent of the exchange’s total trading volume. Exchanges between DOGE and Binance’s own native token Binance USD, exceeded USD 900 million, or north of five per cent of the exchange’s total trading volume.
Despite the rapid price spike seen in October 2022, Dogecoin had yet to regain its all-time high of 73 cents reached in April of 2021, coincidentally the very same day that Musk was guest host of Saturday Night Live, the hugely popular US comedy programme. After Musk’s appearance the coin plummeted by 35 per cent. During one of the show’s comedy segments, Musk referred to Dogecoin as ‘the future of currency,’ but in another he called it ‘a hustle.’
DOGE’s steady rise in popularity over the past two years partly driven by Musk’s peculiar multi-year attachment to the token. He’s referenced it many times on Twitter and even adopted it as a payment method for some Tesla products and services.
You can use DOGE to buy Tesla merchandise on the carmaker’s website, while Musk’s public transit firm The Boring Company will take the crypto as a form of payment on its Las Vegas Loop. Musk has toyed with the idea of letting Twitter users pay in DOGE for its Twitter Blue premium subscription service.
DOGE also leapt suddenly in price in February 2022 when rumours of Musk’s potential Twitter takeover began to spread. It jumped in price by 25 per cent on 16th February 2022 when Musk first announced his intention to buy the social network. Bitcoin and Ethereum were unaffected by the news.
In fact, DOGE’s price has moved in tandem with many of Musk’s crypto-related tweets ever since. His frequent references to the coin have been credited with elevating DOGE to a top-ten ranking of cryptocurrencies by market cap.
The possibility of Musk taking control of the popular social media platform had crypto enthusiasts buzzing for months, with Dogecoin’s Marcus tweeting ‘Can Mr. Musk please purchase the SEC now?’ in a thinly-veiled criticism of the regulator’s foot dragging over approval for a Bitcoin spot exchange traded fund (ETF).
Musk’s purchase of the notoriously money-losing Twitter appears to be motivated by his convictions about free speech and censorship. In the aftermath of the Trump/Russia-gate political scandal, worries about COVID disinformation, and the banning or de-platforming of Russian ‘state affiliated media’ outlets following the invasion of Ukraine, there have been concerns that about abuse of Twitter as a medium for shaping US public opinion.
Musk has also hailed Twitter’s potential as a ‘platform for promoting free speech around the planet,’ but also said the firm’s previous publicly-traded status was a barrier.