Dogecoin: Market Crash can allow in Elon Musk’s favorite crypto

This article is written exclusively for Investing.com.

  • Elon Musk’s favorite cryptocurrency
  • 11. active in its category
  • Cryptocurrencies move up and down based on emotions
  • Low nominal prices attract speculators
  • If Bitcoin and Ethereum take off, DOGE could become more attractive

Cryptocurrencies, fiat currencies and and have one thing in common. Their intrinsic value depends on market consensus on value. The value of cryptocurrencies and fiat currencies is based solely on faith. While gold and silver have industrial and decorative applications, investment demand or belief in their value is the primary determining factor for the price resistance of the least resistance.

Gold is the metal that governments, central banks and monetary authorities have as part of their foreign exchange reserves, thus validating the role of gold in the global financial system. Silver is much more volatile in comparison, but the price tends to follow its precious metal cousin up and down. The lower cost of silver and its greater volatility attract much more speculative interest when the price is going up or down.

In a world of cryptocurrencies, if and are analogous to gold, then their money is. Each DOGE unit represents a fraction of the price of Bitcoin and Ethereum and has developed a history of high price variability that could make it the speculative crypto choice for market participants who want to get on board during a rally.

Elon Musk’s favorite crypto

Elon Musk’s empire is like the universe – it expands. In addition to Tesla (NASDAQ :), the world’s leading manufacturer of electric vehicles, he is the founder, CEO and chief engineer of SpaceX. Its portfolio also includes The Boring Company, which tackles urban traffic and logistics issues by building tunnels. He co-founded Neuralink in 2016, a company that creates devices to integrate into the human brain, facilitating fusion with machine technology. Musk describes the product as “a Fitbit in your skull”.

Musk has made millions on his bets in Zip2 and PayPal (NASDAQ :). Tesla’s growth has brought him billions and driven him to be the richest person in the world. In April, he offered $ 44 billion for Twitter (NYSE :), the social media platform. He plans to privatize the company and expand his empire.

Musk is a modern Leonardo da Vinci (EPA 🙂 or Thomas Edison, with a growing portfolio of different companies. He is also a cryptophile and has a portfolio of cryptocurrencies. Over the last few years, he has developed a special affinity for Dogecoin, the crypto that started as a joke and has grown into a top digital currency. Musk is so in love with DOGE that he owns a Shiba Inu puppy named Floki. {0 | Shiba}} Inu is DOGE’s mascot and trademark. Every time Musk tweets about DOGE, cryptocurrency price volatility tends to skyrocket.

11th largest asset in its category

On May 10, DOGE was the 11th cryptocurrency in its category out of more than 12,390.

Top cryptocurrencies

Source: CoinMarketCap

The chart shows that with 11.09 cents per token, DOGE’s market value is over $ 14.78 billion. DOGE’s position gives the crypto the liquidity and the critical mass, which is no joke.

Cryptocurrencies move up or down based on general sentiment

Cryptocurrencies are alternative means of exchange. Enthusiasts like Musk, Jack Dorsey and others believe that cryptocurrencies will compete with fiat currencies in the coming years. While central banks and governments may issue fiat currencies at will, cryptocurrency values ​​are unaffected by government interference. Their value is determined solely by offers to buy and offers to sell on the market.

As sentiment determines the price level, and with over 12,300 cryptocurrencies to choose from, brand image and market positioning are critical success factors. Musk’s adoption of DOGE as his favorite crypto and mascot Shibu Inu has created a huge buzz.

DOGE / USD

Source: CoinMarketCap

The chart shows that DOGE mostly lay on a fraction of a penny from 2013 to early 2021. Musk’s interest pushed the price to a high of nearly 70 cents per token in May 2021. At the 11.09 cent level on May 10, DOGE corrected lower along with the rest of the asset class. However, the crypto remains at multiples of the price level before 2021.

Low nominal prices attract speculators

The rise, from 5 cents in 2010 to nearly $ 69,000 in November 2021, and its current price level of over $ 30,000 per token, has created a speculative frenzy in the cryptocurrency class.

At the 11 cents per token level, investors and speculators flocked to DOGE as it traded higher and lower along with other asset class members. A low price per token creates a magnetic psychological trait for investors and speculators who dream of bitcoin-like returns. The Shiba Inu brand and Musk’s participation increase the attraction of cryptocurrency.

Bitcoin, at around $ 31,000 per. token, and Ethereum, at the $ 2,340 level, are expensive. A speculator can buy around 282,000 DOGE for the price of one bitcoin or more than 21,200 DOGE for one Ethereum token.

If Bitcoin and Ethereum start, DOGE can offer attractive percentage compensation

High interest rates, rising currency and market volatility across all asset classes have weighed on cryptocurrency prices since November 2021. Bitcoin and Ethereum are market leaders with about 61% of the market value of the asset class, and executives tend to dictate the least resistance to all cryptocurrency prices.

Bitcoin and Ethereum are looking for lows. If the price measures of recent years are repeated, there may be further significant increases on the horizon in the coming weeks, months and years. As they take off, DOGE will likely follow as an obedient Shiba Inu puppy, with Musk encouraging his favorite crypto via his new toy, the world’s largest social media platform.

Leave a Comment