Every once in a while Elon Musk likes to throw his fans in the cryptosphere a bone.
Friday, the Tesla (TSLA) - Get Tesla Inc. Report and SpaceX CEO gave struggling Dogecoin investors a lifeline after name dropping the meme cryptocurrency in a couple of tweets on his influential Twitter account.
Dogecoin prices have been one of the casualties of the demise of stablecoin Terra and its sister token Luna.
Dogecoin prices fell another 6% this week while other cryptocurrencies like bitcoin showed signs of recovery.
In steped Musk with his tweet on Friday and Dogecoin quickly rose 7% to as high as 8.3 cents per coin before giving up some of its gains.
Musk has a long history with Dogecoin. In January he took to Twitter to announce Tesla merchandise could be purchased with Dogecoin.
During the grand opening of the Tesla factory in Austin, Texas on April 7, the tech tycoon included a nod to dogecoin by slipping the image of the most famous of the meme coins into the drone light show at the celebrations.
It was the second time in less than a week that Musk caused a spike in Dogecoin prices.
Dogecoin Performance Tied to Musk
Online searches for "Buy Dogecoin" exploded 392% on April 25, the day Musk's $44 billion-deal to buy Twitter TWTR was announced, according to CryptoWallet.com. Google searches for "How to buy Dogecoin" also increased 301% on the same day, as well as "What is Dogecoin", which rose 237%.
"Hate him or love him, but there’s no doubt that Elon Musk is one of the greatest influencers and innovators of the 21st century," said Tammy Da Costa, an analyst with DailyFX. "With his extravagant ideas and his ‘subtle’ innuendos, Tesla’s CEO and founder of SpaceX also played a major role in promoting the adoption of bitcoin as a means of payment, driving the price of the original crypto just below the $65,000 handle in April last year."
Musk has suggested that Twitter could improve by adopting a subscription model, which he called Twitter Blue and that subscribers should be able to pay in dogecoin.
With a current Twitter following of 87.8 Million, dogecoin could continue to rise if the decision to implement the coin as a payment method increases institutional interest, she said. "With thousands of cryptos now available to trade, the blockchain is where the ‘value’ lies."