What happened
Since late afternoon yesterday, the price of the meme token Dogecoin (CRYPTO: DOGE) had surged by nearly 26% as of 3:57 p.m. ET today after the Shiba Inu mascot replaced the Blue bird icon on Twitter's home page. The price of another meme token Shiba Inu (CRYPTO: SHIB) was also up about 4.4% today for what I assume are similar reasons.
Now what
Twitter is now owned by the billionaire Elon Musk who is a well-known Dogecoin supporter, with the token supposedly being one of three cryptocurrencies that Musk owns. In many past instances, comments that Musk has made about Dogecoin have led the token's price to surge.
Today, on the home page of Twitter, a picture of a Shiba Inu dog, which is Dogecoin's mascot, replaced the Blue bird icon typically in the top left corner of Twitter's home feed. Dogecoin followers have long wondered whether Musk might incorporate some kind of crypto component into Twitter and accept Doge as payment. Furthermore, Musk tweeted out this picture below.
-- Elon Musk (@elonmusk) April 3, 2023
Interestingly, this is all happening after Reuters earlier today reported that Musk recently asked a federal court to dismiss a $258 billion lawsuit that alleges he purposely pumped up the price of Dogecoin only to then let it plummet.
"There is nothing unlawful about tweeting words of support for, or funny pictures about, a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion," said Musk's lawyers in court documents, according to Reuters. "This court should put a stop to plaintiffs' fantasy and dismiss the complaint."
So what
Events like these are part of the reason I would recommend that investors stay away from a meme token like Dogecoin.
The token is extremely volatile and the most random of events can drive the price higher or lower. Other than what appears to be more devoted following than most other cryptocurrencies, Dogecoin has no unique advantage over other cryptocurrencies that would lead me to believe it will be a good long-term investment.
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