- Musk’s tweets fueled uptrends, notably in Dogecoin, Shiba Inu, and PEPE
Memecoins’ volatile nature has led many to question its long-term viability
As a crypto investor with some experience under my belt, I’ve seen firsthand how Elon Musk’s tweets can significantly impact the prices of certain cryptocurrencies, particularly memecoins like Dogecoin, Shiba Inu, and even lesser-known ones like Pepe. It’s a rollercoaster ride that keeps us investors on our toes!
After Ethereum [ETH] ETFs were given the green light for trading within a 24-hour period, Dogecoin [DOGE] and Shiba Inu [SHIB] experienced substantial declines on the price charts, with Dogecoin dropping by about 5%, and Shiba Inu seeing a steep decrease of approximately 65%.
At a point when memecoins appeared to be struggling, Elon Musk, the influential tech tycoon and meme enthusiast, stepped in to save the day once more.
Musk: The memecoin lover
In a recent post on X, Elon Musk honored Kabosu, the canine mascot behind the Dogecoin meme, whose image sparked the genesis of DOGE in the year 2013.
Musk’s post ignited a surge of optimism for memcoins, leading to notable gains for Dogecoin and Shiba Inu. At the current moment, Dogecoin experienced a rise of nearly 5%, while Shiba Inu was priced at $0.00002488 – a 4.5% increase within the past day.
During the same period, Santiment’s analysis of Dogecoin revealed that Musk’s tweet led to an increase in its social significance and online buzz. Yet, this rise proved to be temporary as both social significance and online buzz have decreased considerably since then.
This isn’t the first time!
As a researcher studying the impact of social media on cryptocurrency markets, I’ve observed that Elon Musk’s tweets have held considerable weight on Dogecoin’s price trends since 2020.
Musk’s endorsement of DOGE in 2024 significantly boosted its value, leading to a remarkable 68% increase from the beginning of the year.
Musk mentioned PEPE, a cryptocurrency represented by a frog image, among Dogecoin and Shiba Inu during a tweet on March 15. His post attracted attention from his audience, demonstrating the influence he holds over the crypto market. Unsurprisingly, PEPE’s price experienced a substantial increase of approximately 23% following Musk’s tweet, only to later decline significantly.
Why are memecoins so speculative?
This raises the question – Why are memecoins so sensitive to mere tweets and endorsements?
Memecoins represent humorous concepts from the real world that have been transformed into digital tokens, hosted on the blockchain. These tokens gain popularity and value through speculation in a similar fashion as traditional internet memes. Their worth often surges based on heightened discussion within online forums and communities.
In essence, the future stability of memecoins is questionable due to their extreme volatility. They are more prone to price fluctuations than other cryptocurrencies, with a tweet from a prominent figure potentially causing significant shifts in their values.
Musk’s recent tweet had a notable effect on not just DOGE, SHIB, and PEPE, but also boosted the memecoin market cap as a whole. The total value of these coins reached $64.3 billion according to CoinGecko’s latest report, marking a 2.7% rise in the past 24 hours.
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2024-05-25 19:04