Memecoins soar after Musk names his dog new Twitter CEO
February 15, 2023
The price of DOGE has increased 5.4% during the last 24 hours, according to statistics from CoinDesk, since Twitter boss Elon Musk tweeted a photo of his dog Floki as the next leader of the social media firm.
"The new CEO of Twitter is amazing," the tweet read.
On October 27, Parag Agarwal's control over Twitter ended, and Musk was appointed in his place as CEO. When they first met, the two were close, but as time passed, their friendship reportedly soured as Musk became Twitter's largest shareholder. While Agrawal still follows Musk on Twitter, the new CEO does not follow him back.
After losing an online poll on the subject, Musk was said to have started seeking a new CEO of Twitter in December.
“I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software & servers teams,” he said.
CoinGecko data shows that Floki, which gets its name from Musk's dog, has increased by 41% during the past day.
After the Floki Inu DAO — the organisation that created the coin — passed a governance resolution to carry out a $100 million token burn, the price of Floki increased by approximately 100% in January.
It makes sense to burn tokens since it lowers the supply, which, if demand remains the same, raises the value of each token. This is similar to a stock buy-back in the world of cryptocurrencies.
Not the first time
This is not the first time DOGE has risen in response to Musk's tweet. The memecoin skyrocketed in late January following a report by Financial Times claiming that Twitter is developing a method to allow cryptocurrency payments.
According to a report released in December 2022 by blockchain analytics startup Santiment, disproportionate surges in DOGE, DShiba Inu (SHIB), and other memecoins have historically been the first sign of a market selloff.
Over the past three months, markets have begun to rise from the depths of the crypto winter brought on by FTX. According to CoinDesk, Bitcoin has fully recovered the loss brought on by the FTX. The recovery of the market has also heralded the beginning of an altcoin season, as numerous of these coins have experienced double- or triple-digit gains.
In the past three months, Bitcoin has increased by 34%, while SHIB is up 40%, BONK is up astoundingly 533%, and Floki is up 242%.
The fact that DOGE is actually down 2% during this time, despite the other canine coins screaming at the moon (including today's rise), suggests that, assuming Santiment's theory is correct, we have not yet reached the stage of a market-wide sell-off.
