Tesla CEO, Elon Musk, has prompted another sensational rise in the price of Dogecoin, with a series of tweets causing its price to increase by more than 25%.
Dogecoin is now the fourth largest cryptocurrency in terms of market capitalisation, with an implied value of more than $80 billion.
Speaking to TMZ before his highly-anticipated appearance on SNL, Musk said that while “Dogecoin was invented as a joke”, the most ironic outcome would be if Dogecoin became the real global currency.
The billionaire CEO then tweeted out the video to his 53 million followers, causing an instant spike in the price of Doge from a $0.51 base to as high as $0.64.
— Coin Rivet (@CoinRivet) May 7, 2021
Dogecoin began the year trading well below the $0.01 mark, going on to print a quite extraordinary rally that has summed up the recent cryptocurrency bull market.
It’s worth noting that when assets rise tremendously without being supported by strong fundamentals, it can be a sign that a bubble is about to pop.
The difference between the recent bull market and 2017 is that levels of capital flowing from institutional investors is at an all-time high, with the likes of Tesla itself investing $1.5 billion in Bitcoin earlier this year.
This means that while the market will almost certainly cool off, it is unlikely to go on a 90% correction as it has done in previous cycles.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.