It should be noted that Musk regularly promotes Dogecoin, causing members of the blockchain community to suspect him of deliberately trying to raise the cryptocurrency’s value for his own profit. For example, in August 2022, Elon voiced the advantages of DOGE over Bitcoin, which are very difficult to agree with.

At that time, he said Dogecoin and its community have memes and jokes that cause no one to take the project seriously.

And this is certainly a dubious advantage against Bitcoin, which, despite its limited technical characteristics, gives a stable performance without any delays.

Why Dogecoin rose

This morning, the market capitalisation of Dogecoin, which is the product of the amount of DOGE in circulation by the coin’s exchange rate, is hovering around $13.6 billion. On the evening of Monday 3 April, when the Twitter logo suddenly changed to an altcoin logo, the coin’s value jumped to $0.1 in just an hour. From the day’s average price to the local high, the rise was more than 37 percent.

DOGE’s appreciation is explained by the banal race of traders to get interesting and big announcements from Musk. Mentions of Dogecoin from his side mainly led to the growth of the coin, so everyone wants to make money on it. It is also worth noting that some traders use bots that open trades, for example, immediately after Musk – or any other celebrity – mentions Dogecoin, Bitcoin or any other coin. In fact, that’s what explains why the charts react so quickly to news.

???? YOU CAN FIND MORE INTERESTING STUFF ON US AT YANDEX.DEN!

According to The Block’s sources, the local altcoin bullrun has also caught the eye of a wallet whose address starts with “DH5ya”. As you can see from the screenshot below, the wallet had a huge amount of DOGE worth over $10 billion in total. Some cryptocurrency enthusiasts believe that the wallet belongs specifically to Ilon Musk.

However, Musk denies these suspicions and states that the wallet actually belongs to the Robinhood trading platform. Representatives of Robinhood neither confirm nor deny this information.

Other major meme-coins have also shown notable growth in the last week.

Dogecoin PR by the billionaire is currently the subject of a class action lawsuit in New York federal court. Musk is accused of running a financial pyramid scheme by promoting the coin. Here is a quote from the lawsuit against him.

Following the launch and initial offering of the Dogecoin investment contract, Musk led this multi-billion dollar racket that deliberately manipulated the market to raise the price of DOGE from $0.002 to $0.73 in two years, an increase of 36,000 percent.

The plaintiffs believe that Ilon began collaborating with the Dogecoin Foundation Inc. (DCFI) in 2018.

In 2019, Musk tweeted that “Dogecoin could be my favourite cryptocurrency. That’s pretty cool,” and also posted a tweet “Dogecoin Rulz,” which is also an endorsement of this cryptocurrency. Against this backdrop, the value of the coin almost doubled over the next three days. Musk allegedly found out that his tweets were enough to manipulate the market.

During the next few years Musk periodically tweeted jokes or references to Dogecoin, well, by May 2021 Dogecoin reached a capitalisation of $95 billion. The “Musk effect” led to a 2,000-fold increase in peak daily trading volume. During the same period, the cryptocurrency’s capitalisation jumped almost 400 times – something that would not have been possible for memecoin without the active publicity of a celebrity of first magnitude.

Musk then spoke on Saturday Night Live, where he also mentioned Dogecoin.

As you can see from the chart below, the price of DOGE started falling fast amid the start of a bearish trend in late 2021. And that fall has also taken a serious toll on investors – especially those who bought the altcoin near its peak value.

The aforementioned “DH5ya” wallet also appears in the lawsuit as an address owned by a billionaire. One circumstantial evidence of this is that the wallet had a transaction with 28.061971 DOGE, which corresponds to Musk’s birthday on 28 June 1971, and a transaction with the phrase “Hello, Ilon”.

There were six transactions with 69 coins and two transactions with 420 coins using this wallet. One transfer involved 8,085 coins – an alternative spelling of “BOOBS”. The plaintiffs believe these actions are typical of Musk’s humour, which previously included naming Tesla models so that they form the word SEXY, i.e. S3XY.

We think the mere fact that such a wallet exists – even if it does belong to Ilon – is not as important as his tweets about the coin. When he first started mentioning it on Twitter, it all looked more like an April Fool’s joke. But now the billionaire has become the most influential personage for DOGE – which is not good news for the decentralisation of the crypto market in the context of one man’s ability to influence it.


We don't think Musk's ideas like this are good for the reputation of cryptocurrencies. Yet his actions attract inexperienced users who see the notional DOGE increasing by 20 percent in 24 hours and open a position, because they believe in a further increase. Not only does it not usually happen, but it turns into a collapse, due to which the novice investors incur losses. It would be better if they would get involved in digital assets because of the advantages of the latter, rather than because they want to make a quick buck amid Musk's ridiculous tweets. That kind of PR for cryptocurrencies certainly doesn't make much sense.


What do you think about it? Share your opinion in our Millionaire Crypto Chat.