Dogecoin surges after Musk tweets support for joke cryptocurrency

A minor cryptocurrency created as a joke was seized on by traders after Elon Musk tweeted his apparent support for it.

Tesla CEO Elon Musk’s tweets sparked a rush on a joke cryptocurrency. Picture: AFP

A minor cryptocurrency created as a joke became the latest focus of traders inspired by social media after Elon Musk tweeted a string of messages apparently in support of it.

The price of dogecoin ran up by as much as 47 per cent within minutes after endorsement by the Tesla chief.

His tweets included posts such as “Dogecoin is the people’s crypto” and “No highs, no lows, only Doge”.

Dogecoin is the people’s crypto

— Elon Musk (@elonmusk) February 4, 2021

Mr Musk also posted an image of his face superimposed on a cartoon character holding aloft Doge, the Japanese dog that inspired the cryptocurrency.

Dogecoin, created as a joke to satirise the rise of digital currencies, uses the imagery of a meme featuring the Japanese shiba inu breed of dog.

ur welcome pic.twitter.com/e2KF57KLxb

— Elon Musk (@elonmusk) February 4, 2021

The dogecoin price rose from about four cents to as high as 5.9 cents, according to the Coindesk site, which tracks cryptocurrencies. Later it fell back to 4.7 cents.

The tweets came two days after Mr Musk said he was taking a break from Twitter.

Last week his “Gamestonk!!” tweet added to the share-buying frenzy around Gamestop, the video games retailer. A surge in the price of bitcoin was also put down to one of his tweets.

No highs, no lows, only Doge

— Elon Musk (@elonmusk) February 4, 2021

One American hedge fund was said to have made profits of almost $US700 million from the rise in Gamestop shares. By October Senvest Management had built a stake of 5 per cent in Gamestop, buying most of the shares for less than $US10 each. They climbed to more than $US400 last week.

Richard Mashaal, 55 and a co-founder of Senvest, told The Wall Street Journal: “When it started its march, we thought, ‘something’s percolating here,’ but we had no idea how crazy this thing was going to get.”

Regulators examining the social trading phenomenon are concerned both by restrictions put in place by some of the platforms that prevent people trading, and by the danger of market abuse and the risk that unsophisticated investors taking leveraged bets could be manipulated.

Janet Yellen, US Treasury secretary, said before a meeting with regulators that they needed to “understand deeply” what happened in the recent trading frenzy before taking any action.

The Times