What impact will Musk’s acquisition of Twitter have on Dogecoin?

Dogecoin Trends

After Elon Musk's acquisition of Twitter was finalized, the price of Dogecoin rose accordingly. According to Coinmarketcap data, on the 29th, the price of Dogecoin rose by nearly 75%, reaching $0.1505 at one point. This was also the largest single-day increase in Dogecoin since April 2021.

Dogecoin price trend. Source: Coinmarketcap

From the 25th to the 29th, the total price of Dogecoin rose by nearly 150%, reflecting the general bullish trend of investors on Dogecoin. At the same time, the trading volume of Dogecoin also increased significantly, and the number of transactions exceeding $100,000 increased significantly.

Dogecoin's whale trading volume. Source: Santiment

As of press time, the price of Dogecoin is about $0.1157, which is about 92% higher than a week ago after the correction. In terms of total market volume alone, Dogecoin has surpassed Cardano's native token ADA and become the world's sixth largest virtual currency.

The rise of Dogecoin has also driven the rise of the entire memecoin branch. Shiba Inu, the second largest memecoin in market size after Dogecoin, has risen by about 53% since the 25th. According to data from Coinmarketcap, the memecoin market has been rising all the way, and the 7-day increase of related memecoins has been above 10%.

So why is Musk's acquisition of Twitter seen by the market as such a big positive for Dogecoin?

Musk's relationship with Dogecoin

Many people call Musk the "godfather" of Dogecoin because Elon Musk has a very close relationship with Dogecoin. Musk's Tesla company has accepted Dogecoin as a means of payment, and his SpaceX company has named one of its launched satellites DOGE-1, which means Dog One.

Musk himself has called for Dogecoin several times in the past. When he appeared on the American comedy show Saturday Night Live, he called himself the "father of Dogecoin" and jokingly called Dogecoin "a scam", which caused Dogecoin to plummet upon hearing the news. In addition, Musk has called for Dogecoin several times on Twitter to drive up its price. This series of events shows that Musk's own behavior has shown a strong positive correlation with the price of Dogecoin.

Elon Musk performs on Saturday Night Live. Source: YouTube

After the cryptocurrency bear market began in May, the price of Dogecoin was affected, and Musk's influence on Dogecoin was also weakened. However, his recent acquisition of Twitter has brought an increase in the price of Dogecoin. Investors are arguing: Is it possible for Musk to allow Dogecoin to enter the Twitter ecosystem and become a payment method for Twitter?

Future uses and other possibilities for Dogecoin

For Charles Hoskinson, the founder of the Cardano chain and co-founder of Ethereum, the integration of Dogecoin and Twitter ecosystem is entirely possible. He wrote on Twitter on the 28th, "I think Dogecoin will be integrated into Twitter in some way." As a very senior player in the crypto industry, Hoskinson's words are undoubtedly very important. At the same time, he even invited Dogecoin to become a branch chain of Cardano, and mentioned that he is willing to support the migration of Dogecoin to Cardano for free.

Charles Hoskinson's Twitter. Source: Twitter

However, it is still unclear whether Dogecoin will enter Twitter in the future and how it will enter the Twitter ecosystem. David Gokhshtein, a media person, said on Twitter that Dogecoin will become the "official currency" of Twitter, and believed that "Musk will make Dogecoin run in the Twitter ecosystem in some way." Twitter user @aarnasays also believes that Dogecoin will eventually enter Twitter, which will increase liquidity and "prepare Twitter to enter the Web3 economy era."

Earlier this year, Musk mentioned that Dogecoin could be used as a payment method for Twitter Blue (a subscription service of Twitter) or to limit spam and robots. But after the acquisition, Musk himself has not mentioned any clear plans for Dogecoin.