- Dogecoin (DOGE-USD) is moving on its connection to Elon Musk, but think twice about what it means.
- That deal has a slim chance of falling through in any case.
- Most importantly, historically accurate price predictions bode poorly for DOGE fans.
Dogecoin (DOGE-USD) remains one of the more speculative cryptocurrencies but also one of the most interesting based on recent news and headlines. Dogecoin has long been connected to Tesla (NASDAQ:TSLA) CEO Elon Musk.
That connection has heated up over recent weeks, culminating in Musk agreeing to purchase Twitter (NYSE:TWTR) for $44 billion. Here’s what it means for Dogecoin.
The Dogecoin Twitter Connection
Dogecoin has moved in the past following tweets from Musk. Some believe that Musk, with his newly acquired control of Twitter, could use the platform to champion DOGE in new and interesting ways. If that happens, Dogecoin will undoubtedly move higher.
Does that imply that Dogecoin is basically speculative in nature? Absolutely.
But that’s why investors should be interested in the news that Elon Musk has purchased Twitter.
His previous tweets have resulted in price spikes that have benefited Dogecoin enthusiasts. But that doesn’t mean it is as simple as purchasing Dogecoin and awaiting tweets from Musk.
Timing the news of Musk’s tweets and Dogecoin price movement is far from simple.
Case in point: Dogecoin prices spiked when the deal was announced.
Investors who purchased Doge thinking that it had reached a new level were soon disappointed. Prices quickly increased and then move back down nearly as quickly again. The idea that Dogecoin can benefit based on Musk alone is faulty.
Yes, investors can undoubtedly secure quick gains By playing the headlines. However, Dogecoin will ultimately fail or survive based on the utility that it creates. That has always been the case.
Is It a Done Deal?
Elon musk’s purchase of Twitter isn’t a done deal. It is still contingent upon regulatory approval.
A Reuters article suggests the deal may not even happen.
But there’s a lot of reason to believe it will happen; for one, Morgan Stanley (NYSE:MS) is financing the deal. Backing out wouldn’t be a simple matter. On top of that, there is a $1 billion fee for reneging on the contract.
But at the same time, Elon Musk does have a legitimate reason to back out of the deal.
The price of Tesla stock has fallen dramatically since all of the Twitter chatter began.
If Musk and his handlers come to the conclusion that it makes more financial sense to not buy Twitter, it could happen.
That would be a blow to Dogecoin. And if it were to occur it would be a legitimate reason to sour on the speculative cryptocurrency as the market continues to punish crypto in 2022.
All in all, the thing to take away here is that Dogecoin’s price increased sharply upward on the Twitter news but gave back those gains just as quickly. That leaves investors wondering where prices could go.
Dogecoin Price Predictions
Fortunately, Dogecoin fans do have quite a reliable source when it comes to price predictions. The CoinMarketCap crypto community has a historical average of predicting Dogecoin’s price six months in advance with 69.39% accuracy.
The community, which cast 1,872 votes, came to the consensus that Dogecoin’s price will reach 15.38 cents by the end of May. That same group has proven similarly accurate in predicting the prices of many other cryptocurrencies.
That implies that it is as good a source as any to follow in attempting to establish a position in Dogecoin.
Rather than attempting to chase headlines and guess what Elon Musk made do and how that might affect Dogecoin prices, it is perhaps better to follow the crypto community and its record of strong predictions. Put more simply, there’s a lot to suggest that a short-term investment at less than 15.38 cents could result in gains by the end of May.
However, it must be noted that the same community is also predicting that Dogecoin could fall to levels near 10 cents by the end of June.
In my estimation, it doesn’t make much sense to chase Dogecoin based on Elon Musk and his whims. Yes, speculators make money this way. But Dogecoin is essentially the same as it ever was: a gamble that will remain that way until it provides real utility.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.