Why Dogecoin Was Rising on Saturday

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What happened

One of the most prominent — if not the most prominent — Dogecoin ( DOGE 4.11% ) bulls in the world was helping the cryptocurrency move higher on Saturday. Earlier in the day, Tesla CEO Elon Musk reacted positively to a tongue-in-cheek suggestion about the meme that inspired the token.

When Elon makes a remark even remotely related to Dogecoin, the crypto world tends to listen. The coin was up by over 3% in late afternoon trading.

Image source: Getty Images.

So what

Saturday morning, Musk tweeted yet another of his musings on Twitter, the messaging platform he seems to have a heavy love/hate relationship with.

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” he wrote.

Since he’s a high-profile Twitter user and has over 79 million followers, many answered with recommendations. A user called The Chairman had one off-the-wall suggestion: “just buy twitter and change the bird logo to a doge.”

Off-the-wall suggestions frequently resonate with Musk, so he answered this one with a tweet answering “Haha that would be sickkk.”

Investors likely took this as a fresh endorsement of Dogecoin, a coin Musk has held and, at times, plugged as a viable and valuable investment. Earlier this month, in response to yet another tweet, Musk stated that “I still own & won’t sell my Bitcoin, Ethereum or Doge[coin] [for what it’s worth].”

Now what

It almost goes without saying that no investor should ever buy, hold, or sell any asset based on the pronouncements — direct or otherwise — of a famous person.

That said, Musk’s bullishness is indicative of the passion and the belief certain Dogecoin holders have in their cryptocurrency — which due to its origin and character is frequently derided as something of a joke token. But with a large pack of bulls behind it, it might just have a stronger base than many doubters believe.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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