Why Dogecoin Was a Star Cryptocurrency Today

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What happened

Association with a top businessperson or tech service can do wonders for a cryptocurrency. That appeared to be the dynamic behind the rise of Dogecoin (DOGE 8.94%) on Tuesday, following the rebranding of a top messaging app. In late-afternoon trading, the meme coin was up by more than 9% in price over the preceding 24 hours.

So what

That rebranding is occurring with the company and service now known as X, which in its former life was Twitter. The transformation occurred on Monday, with the micromessaging site’s familiar blue bird logo being replaced with a stylized version of the 24th letter of the alphabet. Other changes are apparently in the works.

Dogecoin and its developers don’t seem to have had anything to do with this, but any news with Twitter — sorry, X — owner Elon Musk attracts attention to the cryptocurrency. He has been an active and very vocal proponent of Dogecoin. Because of this, speculation is rife that the meme coin could be used as a medium of fiscal exchange within the X ecosystem.

Musk’s other big investment, electric vehicle (EV) maker Tesla, accepts only Dogecoin as a cryptocurrency payment for its wares. The company began doing so at the beginning of 2022.

Now what

It’s critically important to note here that Dogecoin’s involvement in X is pure and rank speculation. Neither its developers, Musk, or any official at the micromessaging company has said the meme coin will become part of its environment. While that’s certainly a possibility, given how happy the low-priced coin seems to make the executive, it shouldn’t be the basis of any investment decision.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.