The latest bizarre maneuver by the owner of Twitter, the American billionaire Elon Musk, has been to replace the famous blue bird logo of the social network with a drawing of a dog. But not just any dog: it is the logo of the dogecoin, a cryptocurrency that was born as a joke in 2013, but whose value has come to exceed 40,000 million dollars (more than 36,000 million euros). After the change, which occurred shortly before 9:00 p.m. this Monday in Spain, the value of this virtual currency has skyrocketed by more than 20%.
After the change, which is added to the list of eccentricities shown by Musk since he took control of Twitter —in February he changed the network’s algorithm so that the posts from his personal account were seen more—, the Tesla founder published in his Twitter profile a screenshot of a conversation with another user of the social network last year, in which he invited him to buy Twitter and change the logo for the image of the dog. “As promised”, he accompanied the text of the image, thus confirming that the change was not due to a hack.
The reaction of the markets to this unusual change reflects well the volatility of the world crypto: The digital currency went from trading at seven cents on a dollar around 6:00 p.m. this Monday to shooting up more than 30%, up to 10 cents (0.09 euros) at 9:00 p.m. The momentum has been maintained this Tuesday, and by mid-morning the cryptocurrency was advancing more than 27%. With this advance, the cryptocurrency has seen its value soar more than 35% in the last seven days.
However, the aggressive rise in the price of the currency began hours before the logo change, with movements of tens of millions of dollars by large portfolios (a good part of this digital currency is controlled by large holders. This unusual flow has raised suspicions that behind this phenomenon there is a speculative movement that goes beyond a market reaction to a change of logo on the social network.
It is not the first time that Musk shakes the markets with some movement on social networks. In early 2021, it caused the dogecoin to was fired after a tweet: “One word: Doge.” For these types of maneuvers, the billionaire was sued in June of last year by dogecoin investors. In the lawsuit, they request 258,000 million dollars (about 236,000 million euros) for having created a pyramid scheme to trigger the price of the currency. Musk requested last Friday that the indictment be dismissed, according to Reuters.
Dogecoin, created by software engineers Billy Markus and Jackson Palmer, is based on the meme Doge, which became popular at the end of 2013 and depicts a Shiba Inu dog. Merely claiming to be a fun alternative to bitcoin, the cryptocurrency quickly gained adherents, with its total value hitting $48 billion in April 2021, after skyrocketing 180%. In May of that year, the price of the coin reached a peak of 0.60 dollars. Now, its total capitalization is about 13,600 million dollars, more than 12,400 million euros.
Cryptocurrencies, which seemed doomed after a year plagued by bankruptcies and collapses —which took TerraLuna, Three Arrows Capital, Celsius, Voyager or FTX, among other relevant players in the sector— have suffered a boost in recent weeks. The fear generated by the recent financial earthquakes caused by the bankruptcy of Silicon Valley Bank and the rescue of Credit Suisse has brought investors’ attention back to digital currencies: bitcoin has appreciated around 70% so far this year given the idea that rates will rise more slowly, and it is the most profitable asset so far in 2023.
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