Why Dogecoin is rising today

Dogecoin leapt higher after media outlets reported that Twitter was set to accept Elon Musk’s offer to buy the company.

| More on:
dog using a laptop

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

As of 11:30 a.m. ET Monday, the price of Dogecoin (CRYPTO: DOGE) had risen by roughly 5% over the prior 24 hours as Tesla founder and noted Dogecoin bull Elon Musk pressed ahead in his efforts to purchase social media giant Twitter.

So what

Over the last few weeks, after repeated ideological attacks on the methods by which Twitter deals with free speech issues, Musk launched what it would eventually become clear was a takeover bid. First, he purchased a more than 9% stake in Twitter. At that point, it looked like Musk might join Twitter's board, but he would eventually decline its invitation to do so.

Musk then made a bid to buy Twitter for $43 billion in cash, valuing it at $54.20 per share. In response, Twitter's board adopted a "poison pill" measure to thwart any hostile takeover attempt. Now, however, media reports are saying the company could reach an agreement with him, and Musk looks to have lined up the necessary financing.

Dogecoin is expected to benefit if Musk takes over Twitter because it is one of three cryptocurrencies Musk holds in large quantities, and it's one that he has consistently promoted on social media and elsewhere. Many observers seem to think he would integrate Dogecoin on the platform somehow, which would broaden its exposure and use, and therefore, in all likelihood, its price.

Now what

Considering that Dogecoin started as a joke and doesn't have any unique real-world use cases or technical advantages over the thousands of other cryptocurrencies in circulation today, I've never thought of it as a good long-term investment.

There may be potential for it to become useful if Musk winds up in a position where he can push for Dogecoin network upgrades and integrate the crypto into the Twitter ecosystem, but I would really need to see evidence of that happening first before I'd consider buying Dogecoin tokens.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Tesla and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

a water tap is turned on and showering out banknotes into the open hand of a woman below it.
International Stock News

Companies with high free cash flow margins and high free cash flow yields massively outperform the market over time

What matters for long-term investing success.

Read more »

Woman on her laptop thinking to herself.
International Stock News

Is it time to load up on beaten-down growth stocks (like Tesla)?

Here's a look at some issues facing both the markets and one electric-vehicle maker in 2022.

Read more »

A woman in business attire sits at a desk in an office situation holding a red apple in her hand and smiling.
International Stock News

Why Apple stock climbed on Wednesday

On a mixed day for Wall Street, channel checks reveal some positive developments for Apple investors.

Read more »

amazon delivery
International Stock News

Why Amazon stock rose while the market slept on Wednesday

Tech stocks might just be waking from their summer slumber, and an analyst pegs this one as a top pick.

Read more »

woman watching netflix on her phone
International Stock News

4 potential winners from Netflix’s advertising plans

Netflix needs a big partner or two for its forthcoming ad-supported tier.

Read more »

tesla model 3
International Stock News

3 reasons Tesla could soar after its stock split

The electric vehicle manufacturer is firing on all cylinders (not literally, of course).

Read more »

A disappointed man slumps in his chair and holds his head while playing an online game
International Stock News

GameStop is in trouble — and it’s not because of Congress

The threat of a slow-moving Congressional committee is not the stock's most pressing worry.

Read more »

A man stands on a ladder in a stripey one-piece swimsuit, ready to plunge into the freezing water through a hole in the ice.
International Stock News

Why Meta Platforms plunged on Tuesday

On a bad day for tech stocks, Meta did even worse on the back of a pair of negative headlines.

Read more »