Twitter’s (NYSE:TWTR) acceptance of Elon Musk’s $44 billion bid also significantly improves the prospects of Dogecoin (DOGE-USD), Musk’s favorite cryptocurrency. Bitcoinist notes he has been a huge supporter of the crypto and “relentlessly pushed [it] to the mainstream,” including on Twitter.
Recently, a well-known Bitcoin (BTC-USD) supporter gave an interview with Bloomberg expressing his support of Dogecoin. Roger Ver, known as “Bitcoin Jesus” for his fervent crypto advocacy, told the magazine he is a fan of the coin. Ver is known as one of the earliest, most ardent supporters of Bitcoin. He recently raised capital for his startup Blockchain.com at a $14 billion valuation.
Ver says Dogecoin is faster and cheaper to use than Bitcoin. It costs about 1 cent per transaction to use DOGE, but between 50 cents and $1 per transaction with Bitcoin.
Moreover, Dogecoin can process transactions much faster than Bitcoin’s platform. Typically, it takes only about one minute for Dogecoin’s platform to close a transaction. By contrast, Bitcoin can take up to 10 minutes. Some say this is because its has a more difficult hashrate than DOGE. That makes it more secure. But others argue a faster processing speed helps avoid hacks just as well.
In any case, provided Musk’s deal goes through, his plan to start subscriptions on the site means Dogecoin could become a payment option for Twitter users. If both subscribers and advertisers have the option of using DOGE, it could significantly raise the visibility, viability and popularity of Dogecoin as a payment mechanism.
In fact, this might become a proverbial tipping point for DOGE. It could lead to a rush of other sites becoming willing to use Dogecoin for transactions.
Dogecoin is now the 12th largest cryptocurrency, according to Coinmarketcap.com. It has a market value of more than $17.3 billion. This is less than one-third of the $44 billion takeover offer for Twitter.
As a result, DOGE could rise to the same value now that Musk is backing both of them. Even if Dogecoin gains just $18 billion of that $44 billion market value, it could rise to more than $1 per DOGE token. That would put it well over its all-time high of 68 cents from a year ago. Therefore, the Twitter deal should bring good value to Dogecoin over the long run.
On the date of publication, Mark Hake did not hold (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.
