Elon Musk has always had an influence on Dogecoin’s price. In a recent tweet, he announced that he is retaining his cryptocurrency holdings. The Tesla CEO has a stake in Dogecoin, Ether, and Bitcoin. The announcement had a significant impact on the market, with Dogecoin suddenly touching a 5-day high of $0.119, rising 7% within just 2 hours.
Bitcoins were created in 2009, and since then, many have existed in circulation; this type of digital money has managed the Auto-Trading system and gained the acceptance of all users worldwide and in any area where economics and finances are applied, and I can do some business.
Elon Musk’s Latest Announcement
Musk’s tweet was in response to another Twitter thread where he asked his followers for their thoughts on potential inflation in the near future. He revealed the impact of inflation on Tesla and SpaceX due to the raw materials and logistics involved in these businesses.
He advised people to own assets such as stocks and real estate to hedge against inflation, instead of stocking dollars. He further claimed that he continues to hold an undeclared amount of Bitcoin, Doge, and Ethereum and has no intention of selling them.
Dogecoin’s Recent Price Movement
Dogecoin has been following a downward trend for a week before falling to a 7-day low of $0.1107. Just 2 hours after the Tesla CEO tweeted, the meme coin’s price rose 7% to touch $0.119. Later it stabilized to trade at around $0.114. The digital currency’s 30-day high is still much higher at $0.1574.
If anyone is to go by Musk’s advice, they should also own stocks or homes to fight off high inflation. He also suggested investing in stocks from companies that make valuable products.
Volatility in Dogecoin Prices
Sudden price changes in Dogecoin and other crypto coins have become the norm. Doge has a history of jumping in price whenever Musk makes any mention of the coin, as he has proclaimed himself as the ‘Dogefather’. According to a recent study, Dogecoin’s price is especially vulnerable to rumors on various social media websites.
After Musk’s recent tweet, Bitcoin and Ether also experienced a slight increase in their prices before stabilizing. While Ether gained 2.2%, Bitcoin rose 1.6%. It is believed that Tesla is one of the largest companies to hold Bitcoin. Last February, Tesla made an investment of $1.5 billion in Bitcoin. It has also been involved at one point in accepting Bitcoin as payment for its products, before limiting the option to certain merchandise.
When it comes to overcoming inflation, many traditional market investors have been exploring options for safety. This may just be the right time to find out whether cryptocurrencies can provide that safety net or not.
The Inflation Challenge
Musk seems to be the only top executive out there to advise investors on holding their Dogecoin to fight off inflation. Companies all over the world are exploring ways to overcome the inflation challenge. The U.S. Labor Department reports that the Consumer Price Index (CPI) has recently touched a 40-year high. When compared to the prices from February last year, the current prices have risen by 7.9%.
The Russia-Ukraine conflict is further expected to increase the inflation pressure. While all the sanctions on Russia are meant to make an impact on its economy, the restrictions have also affected the global prices of oil and commodities. Rising inflation and sanctions have always been promoted at the challenges that decentralized and deflationary assets like cryptocurrencies were meant to help with.
- The transactions taking place on the Bitcoin network cannot be interfered with by third parties
- Bitcoin has a limited supply of 21 million ever. Only a limited number will ever exist.
Despite these given advantages, the original cryptocurrency has continued to maintain a slow performance over the past several months. Its price has continued to trade in the $44,000-$39,000 bracket since the start of the year. This is much lower than its all-time high price of almost $69,000.
This is not the first time that Musk’s tweets have made a whiplash impact on Dogecoin’s price. In July 2021, Doge gained 7% after another one of Musk’s tweets that revived interest in the meme coin. It seems every time he makes a tweet on his favorite digital coins, buyers are drawn to these assets. At that time, Doge was trading at around $0.24 before jumping to $0.2573 after his tweet. It wouldn’t be incorrect to claim that Elon Musk has become a big influencer on the crypto market.