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Why Dogecoin spiked so much after Elon Musk’s tweet

The Dogecoin cryptocurrency spiked after Elon Musk revealed something about its future

Is Dogecoin a good cryptocurrency coin?
The Dogecoin cryptocurrency spiked after Elon Musk revealed something about its future.
Illustration by Alex Cochran, Deseret News

Dogecoin saw a massive spike Tuesday after Tesla CEO Elon Musk tweeted about the cryptocurrency token, revealing that it might have a big future.

  • The coin jumped 20% Tuesday morning.

Musk tweeted that Tesla would accept dogecoin as payment for some merchandise, giving the coin another real-world use.

  • “Tesla will make some merch buyable with Doge & see how it goes,” Musk said on Twitter.
  • Musk has long promoted Dogecoin, mentioning it during an appearance on “Saturday Night Live” in the summer, which caused a separate spike for the coin.

Dogecoin — like other meme-based cryptocurrencies such as Shiba Inu coin — often relies on social media hype and chatter to see its value rise. When more people talk about it, more people invest in the coin, leading to an increased value in the coin.

  • “Tweets from Musk and surging interest from a wave of amateur investors fueled a speculative frenzy in the cryptocurrency earlier this year, driving its price higher,” per CNBC.

Musk’s tweet aligns with advice from Dallas Mavericks owner Mark Cuban, who said in May that the Dogecoin crypto token needs to gain utility in order to find success. Cuban allows people to buy items at the Dallas Mavericks team store using Dogecoin.

  • “Meme coins like Doge only work if they gain utility and users use them for that utility,” he tweeted.
  • “As long as more companies take doge for products/services, then Doge can be a usable currency,” he tweeted.