Dogecoin jumps after Musk’s Twitter deal U-turn
Billionaire proposes purchasing Twitter for the originally agreed $44bn
Dogecoin (DOGE) traded up by 6.06% at $0.0644 by 13:00 (UTC-1) on Wednesday following the news that Elon Musk will proceed after all with his plan to purchase Twitter.
The South Africa-born billionaire and CEO of Tesla had previously attempted to back out of the proposed $44bn (£38.7bn) acquisition of the social media giant.
Musk cited three key reasons for abandoning the deal: that Twitter had misrepresented the number of spam accounts in its disclosures to the US financial watchdog; it had failed to provide satisfactory information on spam accounts; and that it had failed to consult with him before firing a number of senior employees.
A Delaware court had ruled in favour of Twitter, which sued Musk after he pulled out of the deal, and set a trial date for 17 October.
On Tuesday, Musk’s lawyers wrote in a court filing : “We write to notify you that the Musk parties intend to proceed to closing of the transaction.”
Responding to the filing, Twitter said: “The intention of the company is to close the transaction at $54.20”.
Shortly before the confirmation, trading of Twitter stock was temporarily suspended after Bloomberg reported news of Musk’s turnaround. The social media company closed Tuesday up by 22% at $52. The stock had fallen as low as $31.30 in July when relations between the two camps soured.
After the news broke, Musk announced via Twitter that his acquistion of the platform was "an accelerant to creating X, the everything app". Although no further details exist on what this could entail, commentators have suggested that the US-based businessman could attempt to ape the likes of Chinese 'super-apps' like WeChat, which integrate a wide range of services.
Dogecoin boosted by Twitter deal progress
The near-$500m rise in market capitalisation enjoyed by Dogecoin in less than 24 hours on Wednesday, reflected the extent to which the actions of one man affect a cryptocurrency worth $8.51bn.
Musk frequently praised the meme-inspired cryptocurrency during the peak crypto bull run of 2020-2021. It reached a brief all-time high of $0.7376 in May 2021 and a market capitalisation of almost $90bn thanks to public support from the richest man on Earth.
However, shortly after Musk jokingly admitted that his support was “a grift”, the Chinese Communist Party announced a ban on cryptocurrency transactions and mining, significantly reversing crytpo market momentum.
Although Dogecoin now trades 91% below its record high, the cryptocurrency continues to experience sudden fluctuations thanks to Musk. In December last year, the crypto surged by more than 20% after Musk said that Tesla will accept it as a means of payment for merchandise.