Yerevan (CoinChapter.com) — Dogecoin, a collectible token that serves practically no purpose as a financial asset, rose more than the S&P 500, the Dow Jones, the Nasdaq Composite, and every other stock market index combined this Wednesday. And quite amusingly, what pumped the so-called joke cryptocurrency was a tweet from a celebrated billionaire, who called himself the “Dogefather.”
Elon Musk…
…was at its troll-best as he provided a backstop to Dogecoin’s bullish bias all over again. He tweeted early Wednesday morning five words “The Dogefather. SNL. May 8” to his 52 million followers. The tweet hinted that the Tesla and SpaceX founder would appear on the American late-night comedy series, Saturday Night Live, on May 8.
A non-market announcement, the tweet was nonetheless enough to influence speculators into buying Dogecoin. The DOGE/USD exchange rate surged by 41 percent after Elon Musk endorsed the token. That’s it. Nothing else justified the pair’s supersonic intraday pump.
Read More: Tesla Posts Record Net Income Due To Bitcoin Sales
The tweet also followed Tesla’s quarterly earnings report, wherein the US carmaker marginally missed losses thanks to its regulatory creditors and Bitcoin investments. The filings showed that Tesla sold 10 percent of its $1.5 billion Bitcoin holdings, making a net $101 million profits. Elon Musk later tweeted that Tesla went ahead with the sale to prove Bitcoin as a liquid asset.
Meanwhile, the billionaire also admitted that he had not sold any bitcoin from his own holdings. The slip-of-tongue statement served as a piece of evidence that he holds cryptocurrencies in his personal portfolios. It also raised expectations that Mr. Musk has a big Dogecoin collection in one of his crypto wallets.
Dump Worries Remain
Launched as a joke cryptocurrency in 2017, Dogecoin rose to international fame in 2021 due to Elon Musk’s relentless, troll-like support of the token. In February, the entrepreneur sent out a string of tweets, starting with just one word, “Doge,” and following that up with “Dogecoin is the people’s crypto” and “No highs, no lows, only Doge.”
Read More: Every DOGE Has Its Day: Dogecoin Holds Key Bullish Support
The tweets pumped the Dogecoin prices incredibly higher. Earlier before, the token soared by over 800 percent in a GameStop-like Redditor-backed copycat rally. But so far, no concrete fundamental has appeared that explains Dogecoin demand other than excessive speculation, except NBA’s Dallas Mavericks that decided to accept the token for its tickets and merchandise sales.
That pretty much leaves Dogecoin at the mercy of a tech billionaire looking to offset his business risks by investing in cryptocurrencies. If that reason is enough for bulls, the DOGE/USD bids could keep on climbing higher. If not, the maximum risk for the pair is to the downside.
Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.
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