Dogecoin Rally and Dump : The twitter Drama

The alteration of Twitter's website logo to the "doge" meme had a booming effect on the value of the Dogecoin cryptocurrency, despite possible disapproval from Twitter users regarding the replacement of the blue bird logo.

The meme, inspired by Kabosu, a Shiba Inu whose photo became viral in 2010, is well-known as the symbol of Dogecoin, a cryptocurrency created as a joke in 2013 by Billy Markus and Jackson Palmer in response to the excessive speculation surrounding cryptocurrencies at the time.

The change took place on 3rd April which is well after the April Fool's day which ruled out the possibility of a prank . The change initially caused a ruckus on #cryptotwitter as no one had any idea that this was about to happen and it instantly got #dogecoin in the top trending and initiated a strong rally

Elon Musk tweeted the much awaited reason for this change and it was not quite what the user's expected

What may seem like a joke had a quite turbulent effect on the market especially the Dogecoin's positions on various exchanges

In only one day following the adjustment, futures tracking the well-known Dogecoin (DOGE) coins saw $26 million in liquidations.

Shorts and longs, or wagers for and against, were almost equally affected. While shorts took on $13 million in losses, longs saw $10 million in liquidations. The biggest losers were traders on the cryptocurrency platform OKX, who lost $12 million on dogecoin futures contracts.

The amount of unsettled futures contracts, or open interest, on dogecoin futures increased to more over $580 million.

This short lived drama ended on 7th April and the original blue bird logo was restored which triggered a dump in the market

Why did Musk actually switch Doge to the Twitter logo?

Although the situation is still unclear, it is suspected that Musk is only attempting to deflect attention from the lawsuit that Dogecoin investors have filed against him. Perhaps he intended to demonstrate that his tweets about the Doge aren't an attempt to deceive anyone and shouldn't be taken seriously at any particular moment by altering the logo to Doge. This is the precise position his attorneys took in court, describing the case as a "fanciful work of fiction" based on the Twitter owner's "innocent and frequently silly tweets." Therefore, the purpose of altering the logo may be to simply demonstrate to the court that his activities regarding Dogecoin are absurd and unimportant.

Interestingly, Musk has been a vocal supporter of Dogecoin, even claiming that it has the financial fundamentals to serve as a mainstream form of currency. In a 2021 interview with Time magazine, Musk stated, "Even though it was created as a silly joke, Dogecoin is actually better suited for transactions [than Bitcoin]. It is slightly inflationary... but that's actually good as it encourages people to spend rather than to hoard it as a store of value."

Musk has also confirmed that Dogecoin is one of only three cryptocurrencies that he owns, alongside Bitcoin and Ethereum. Despite the recent lawsuit, he remains committed to supporting Dogecoin, tweeting in June 2022 that he would not sell his Dogecoin holdings, regardless of price fluctuations. It remains to be seen how this legal battle will impact the future of Dogecoin and its popularity among investors.

CONCLUSION

In the race for mainstream adoption of #crypto one might find it hard to position such memecoins with Multi Billion Dollar market cap which initially were a joke as a counter to the traditional systems but it goes on to prove that money has value if the people believe in it and it is the believe of the people buying Dogecoin which turned a joke into one of the most highly valued crypto in the industry.