Dogecoin (DOGE) was up nearly 22 per cent over the past 24 hours as billionaire Elon Musk‘s purchase of Twitter for about $44 million approached the finish line, which is likely to close by Friday.
Amid the Twitter acquisition buzz, Dogecoin zoomed about 22 per cent in the last 24 hours to hit $0.08028 on Thursday, but gave up some gains to trade at $0.07707 at 14.40 hours IST, the coinmarketcap data suggested.
The total volume zoomed close to 200 per cent as Dogecoins worth $2.08 billion exchanged hands in the last 24 hours, with its total market cap rising above $10.32 billion. There were 132.67 billion Dogecoins in supply at the same time.
Musk has been a major supporter of DOGE, which has become a proxy for sentiment about him. The entrepreneur’s statements about the token have also consistently influenced its price.
Commenting on the renewed interest, Edul Patel, CEO and co-founder of Mudrex, said the rally in the memecoins can be attributed to multiple factors, with the long-awaited Twitter acquisition deal with Elon Musk being the biggest one.
“Markets tend to react more to speculations and hype when a particular event is nearing than during the actual event,” he added. “A significant rally in the bluechip tokens and altcoins space gives more impetus to the memecoin momentum.”
The total gains in Dogecoin have been about 40 per cent in the last 48 hours, the data suggested, pushed by the mercurial technocrat’s acquisition of the microblogging website.
Despite this stellar rise in Dogecoin, market analysts have a word of caution for the investors and suggest that one must not read much into it. It’s just a dead cat bounce, they suggested.
The worst is most likely over but that does not translate to a linear upwards rally from here, said Patel from Mudrex. “We are likely to witness some corrections and the best approachis disciplined systematic investments and diversification.”
The push was not only restricted to Dogecoin. Other meme tokens, including Shiba Inu, Dogelon Mars, Baby Dogecoin, SamoyedCoin, Monacoin, Musk Doge SolDoge and others rallied between 5 and 85 per cent in 24 hours.
Ujjawal Panchal, Co- Founder & Chief Technology Officer, MemeChat, said there is a lot of market manipulation going on currently and one should not speculate, as nothing changes the long-term bearish viewpoint.
The worst is not yet over, he cautioned. “Western economies, which have the largest chunk of skin in the game, are yet to go into a recession, ” he added.
Memecoins are a bull market fad, only driven by hype but only fundamentally sound crypto tokens have the potential for growth in the near term. Memecoins, like all cryptocurrencies, are volatile.
Prashant Kumar, CEO and Founder at weTrade, said memecoins have a young fan base and are popular among millennials and Gen Z. With their small-ticket size and smaller investment amounts, there is a renewed interest in them.
Given the global economic factors and the speculative nature that memecoins have, their fluctuations are much more stark, he added. “There is no fixed number of a particular memecoin making it more suitable for short-term, swing investments.”
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)