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Elon Musk SpaceX Dogecoin tweet fails to spur price

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·Contributor
·4-min read
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Elon Musk said that the satellite, dubbed Doge-1, would be the first-ever crypto in space and the 'first meme in space'. Photo: Hannibal Hanschke/Reuters
Elon Musk said that the satellite, dubbed Doge-1, would be the first-ever crypto in space and the 'first meme in space'. Photo: Hannibal Hanschke/Reuters

A tweet from Elon Musk saying that his SpaceX company would accept dogecoin (DOGE-USD) to fund a lunar mission next year failed to spur the price of the cryptocurrency on Monday.

Dogecoin, which had been rallying last week as internet users tried to push the value of the coin to $1 (£0.70), was lower on the day, down 1.1% to $0.53.

The Tesla (TSLA) owner said that the satellite, dubbed Doge-1, would be the first-ever crypto in space and the “first meme in space”.

In a statement on Sunday, Geometric Energy Corporation also announced the “DOGE-1 Mission to the Moon.” The Canadian company is partnering with SpaceX to send a 40-kg satellite to the moon on a Falcon 9 rocket in the first quarter of 2022.

“Having officially transacted with DOGE for a deal of this magnitude, Geometric Energy Corporation and SpaceX have solidified DOGE as a unit of account for lunar business in the space sector,” Samuel Reid, Geometric Energy’s chief executive, said in a statement.

“To the mooooonnn!!” Musk tweeted on Sunday.

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It came after the price of dogecoin slumped from record highs on Sunday after Elon Musk’s Saturday Night Live (SNL) appearance.

Watch: Wanna lose money? Buy dogecoin -advisor

Analysts had expected Musk to mention the meme-inspired crypto on the show and send prices spiking, instead his plug saw the coin crash nearly 25% from $0.69 to $0.48 a few minutes into his stint.

However, despite the recent losses, the cryptocurrency, which was conceived as a joke in 2013, has gained about 400% over the past month, and has spiked more than 14,000% since the start of the year.

Dogecoin was down on the day on Monday morning. Chart: Yahoo Finance
Dogecoin was down on the day on Monday morning. Chart: Yahoo Finance

As well as getting support from Musk, dogecoin has been backed by rapper Snoop Dogg and Kiss bassist Gene Simmons.

Additionally, a number of financial institutions and well known investors have thrown their weight behind crypto and blockchain technologies.

Last week, popular exchange Gemini announced support for dogecoin, after eToro also added it to its online trading app. Meanwhile, Citigroup (C) was reported to also be weighing the option of providing cryptocurrency-related services after a surge in interest from its clients.

The bank has not yet decided if it will offer clients these services, but trading, custody, and financing are all under consideration, the Financial Times said last week, citing Itay Tuchman, the bank's global head of foreign exchange.

Read more: The history of dogecoin, the joke currency that's worth more than Barclays and Lloyds

Ethereum (ETH-USD), the second largest cryptocurrency, has set yet another record this week after the price climbed to a new high of $4,105 overnight.

“Demand from institutional investors is fuelling this latest move higher as large-scale buyers diversify their exposure in this emerging asset class, with ethereum the natural next pick,” Simon Peters, market analyst at eToro, said.

“The coin also has a far lower dollar value than bitcoin (BTC-USD), which is currently trading just below $59,000 after a move up itself over the weekend.”

As more investors pour into ethereum, increasing its market cap, the share of bitcoin has fallen steeply from around 60% to 45% over the past month, according to data from JP Morgan.

“Part of this decline has been helped by increased institutional interest in ethereum,” Nikolaos Panigirtzoglou, cross asset research analyst at JP Morgan said.

“But to the extent it is driven by a rally in other cryptocurrencies driven more by retail demand, it carries some echoes of the froth that was evident in December 2017 when the share of bitcoin had fallen from around 55% to below 35%."

Read more: Cryptocurrency ethereum breaks $4,000 mark as it hits record high

However, cryptocurrencies have been under the watchful eye of governments and regulators who want to hone in on the sector amid rising demand.

On Thursday, Bank of England governor, Andrew Bailey downplayed the rising value of cryptos.

Bailey said cryptocurrencies have no "intrinsic value" and people who invest in them should be "prepared to lose all [their] money."

The governor's comments echoed similar warnings from the UK's financial watchdog.

Laith Khalaf, financial analyst at AJ Bell, said: “The SpaceX Dogecoin moon mission isn’t a giant leap for cryptocurrencies, because back here on planet Earth, crypto’s long term adoption by consumers, businesses and investors remains highly uncertain, to say the least. 

"If an asset can drop 30% on the back of one individual’s appearance on Saturday Night Live, this tells you there’s not a huge amount of fundamental value holding up its price."

He added: "For consumers, there’s little financial harm parting with a few pounds for a bit of fun, but don’t confuse this activity with saving for your future.”

Watch: What are the risks of investing in cryptocurrency?

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