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Dogecoin: Musk, stocks and the Twitter puppy for artificial market manipulation

Dogecoin: Musk, stocks and the Twitter puppy for artificial market manipulation

“Twitter puppy”. A few days ago, the billionaire Elon MuskCEO of the blue bird social network, arbitrarily and unilaterally replaced the main logo with that of the Dogecoin cryptocurrency.

The result? Dogecoin broke above $0.10 and reached its highest level in 4 months. Voices against it also arose, because after these types of actions, Musk is being accused of manipulating the price of this cryptocurrency and making it grow artificially in a short period of time.

Fernanda Juppet, CEO of the CryptoMarket exchange platform, explains that it is not the first time that Elon Musk has resorted to this tactic. In 2021, a SpaceX mission was fully funded by Dogecoin. Even Tesla accepts payments with this cryptocurrency on some products.

“Considering that Musk now runs Twitter, and is one of the most followed people on social media, he is aware that any mention of Dogecoin generates market movements that also benefit him financially,” Juppet said.

Dogecoin, Twitter and Musk: manipulation of the crypto market?

For the CEO of CryptoMarket, changing the Twitter logo at the discretion of the Dogecoin puppy creates a risk of manipulation of the crypto market. By making interventions of these characteristics in a company in which he has a direct interest, Musk causes artificial changes that do not reflect a real interest in the acquisition of the crypto asset.

“In this way, the change of the Twitter logo causes a greater demand for Dogecoin based only on speculation, that is, it opens spaces for investors with large amounts of this cryptocurrency to increase their profits by selling to non-expert investors, who suffer damage. important when asset prices adjust,” says Fernanda Juppet.

An increase in its volatility is also generated, since massive speculation with Dogecoin can cause an increase in the volatility of the value of the cryptocurrency and affect the market as a whole.

“It will be difficult for investors to know when is the best time to buy or sell because they will be at the mercy of information asymmetries caused by a relevant market player, when the natural thing is that the price is governed by supply and demand . Moreover, this is the reason why the manipulation of market prices in shares or other regulated assets is a crime”, explains Juppet.

Elon Musk, Twitter and the loss of trust in Dogecoin

Finally, Elon Musk’s move with Twitter may lead to a loss of confidence in cryptocurrencies: if mass speculation in Dogecoin causes huge losses for individuals, this may harm the crypto ecosystem as a whole.

“Many investors may end up moving away from cryptocurrencies without realizing their potential to promote financial inclusion as an inflation haven, investment tool, and/or remittance transfer, as these activities directly affect the credibility of the ecosystem as a whole,” comments the CEO of CryptoMarket.

Dogecoin: Elon Musk leaves one of the strongest cryptos

Although Musk’s lawyers argue that the effects are minimal, we know better. Her constant mentions of Dogecoin have made her one of the strongest since she started promoting it.

According to CoinMarketCap, Dogecoin is the eighth most valuable cryptocurrency, with a market capitalization of more than $13 billion.

For Juppet, it is very good that cryptocurrency reaches a prominent place, since each proposal has a differentiating project behind it that seeks to attack a specific need.

“The problem is when its growth occurs on the basis of speculation that ends up damaging confidence in the market, instead of goods and services through which value is created,” he concludes.

Source: Larepublica

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