Amid a broader market rally, cryptocurrencies gained tens of billions in market value this week, partially fueled by a 40% gain for dogecoin because of Elon Musk, the world’s wealthiest man and self-proclaimed “Dogefather,” completing his takeover of Twitter.
The crypto market was worth $1.05 trillion Friday, according to CoinGecko’s tracker of more than 13,000 cryptocurrencies.
That’s nearly a $100 billion increase since last Friday, surpassing the $1 trillion threshold Wednesday for the first time in six weeks.
Bitcoin remains by far the largest cryptocurrency with a $396 billion market cap, according to forbes‘ tracker of digital assets, and its 7% jump to $20.639 drove most of the week’s rise.
But perhaps the most newsworthy was the ninth-largest coin by market cap, Dogecoin.
Dogecoin rose more than 40% to $0.085 over the last week, with nearly all of the gains coming since Wednesday as Musk’s takeover of Twitter grew more certain.
Doge bulls believe Musk could integrate the coin into the social network, pointing to Musk’s texts with his brother in which the billionaire suggests verifying users by charging fees paid in dogecoin to tweet.
$11.5 billion. That’s dogecoin’s market cap as of Friday, a larger market cap than American Airlines.
Musk helped inspire dogecoin’s meteoric rise in 2021 amid the general meme trading mania, with the coin peaking at $0.69 last spring before crashing back to earth after Musk called it a “hustle” while hosting Saturday Night Live. After exploding in value in 2020 and 2021, the crypto market came crashing down to earth this year, shedding about $2 trillion in market value and bitcoin falling 57% year-to-date. Crypto’s 2022 losses are far more than the also falling stock market, with the S&P 500 and tech-heavy Nasdaq falling 19% and 30% year-to-date.
What To Watch For
The Federal Reserve’s interest rate decision next week. If the Fed indicates it will continue its aggressive policy then risk assets, like crypto, could “react badly,” says Marcus Sotiriou, an analyst at brokerage GlobalBlock. Hopes the policy may not become any more aggressive have since helped markets recover from lows this year.
Musk’s favorite cryptocurrency may be popping off thanks to the Twitter deal, but the stock in which most of his net worth is tied up has gone the opposite direction. Tesla shares are down 8% since October 4, when Musk’s intentions to move ahead with the Twitter deal went public, as Tesla investors fret about the company’s CEO Musk needing to sell more Tesla shares to fuel his purchase and divert his attention away from the electric vehicle firm.
Twitter Tale Wags Dogecoin To 10% Gain (forbes)