Dogecoin Rises After Elon Musk News. What’s going on with this popular meme coin?
Dogecoin is making headlines after newly elected President Donald Trump announced the creation of the Department of Government Efficiency at X last Wednesday.
This meme coin was worth 16 cents on Election Day and has since more than doubled to a high of almost 39 cents earlier today. However, according to CoinMarketCapit is still less than half as valuable as its all-time high of almost 69 cents in May 2021.
This unofficial division shares the same acronym as the cryptocurrency: DOGE. Trump announced that this new advisory department would be led by Elon Musk and Vivek Ramaswamy, a former Republican presidential candidate. The stated goal will be to look for ways to reduce government spending to “stimulate large-scale structural reforms.”
This department does not yet exist and will probably not start as an official government department. The creation of an official government department requires an act of Congress.
Read more: How Trump’s election victory could benefit Elon Musk’s Starlink
What does all this have to do with dogecoin?
Musk has been a big supporter of dogecoin over the years. Amid the post-election stock market boom, Musk’s new position as co-head of DOGE sent the cryptocurrency soaring on Wednesday. It has remained high since then, with slight fluctuations.
“The appointment of Elon Musk to lead the Department of Government Efficiency, or DOGE, has catalyzed investment in Dogecoin,” said Andrew Lunardi, a digital currency expert and head of chain adoption at Immutable, a gaming company for crypto assets.
Musk’s tweets and public statements have helped boost the value of dogecoin in the past, and investors and experts like Lunardi expect this trend to continue as Musk continues to promote the cryptocurrency in the future.
Dogecoin peaked in May 2021 and then dropped significantly. The value of this cryptocurrency has remained relatively flat since the summer of 2022 until it saw a slight increase in the spring of this year and has since surged.
The value of cryptocurrency to other digital coins has risen since Trump’s presidential victory last week. In July, Trump announced at a Bitcoin conference that he wants to make the US the ‘crypto capital of the planet’.
Should I invest in dogecoin, bitcoin or other cryptocurrencies?
Investing in cryptocurrency can be risky. It is a very volatile investment vehicle. If you’re interested in exploring cryptocurrency like dogecoin or bitcoin, investment experts emphasize researching the market and never investing more than you’re willing to lose.
“Bitcoin [and other cryptocurrencies] has been on a wild ride in recent years, but just because it hit an all-time high after the election doesn’t mean investors should suddenly change their strategy,” said Alex Michalka, vice president of investment research at Wealthfront. an investment platform.
It is also generally recommended to diversify your portfolio to help reduce your risk. If you don’t want to immediately experiment with crypto investing, consider investing a small portion of your portfolio in crypto exchange-traded funds. It is always advisable to consult a trusted financial advisor before making any changes to your investment strategy.
“I would encourage investors to consider cryptocurrency as just one type of asset class that you could include in your long-term wealth building strategy,” Michalka added.
Why is crypto so volatile?
Cryptocurrencies such as dogecoin and bitcoin do not have fully established valuation methods like other stocks and investments. Instead, the price is mainly driven up by hype. We’ve seen crypto soar to historic highs, only to fall to dramatic lows soon after. That makes this investment category extremely risky.
“The crypto market has never been a good place to invest. But at times it has certainly been a profitable place for some to speculate,” said Robert R. Johnson, professor of finance at Creighton University.
As cryptocurrency becomes easier to value and sees wider adoption, Lunardi suspects this digital currency will become less volatile. But for now, he warns that it still remains a risky asset class.
