Dogecoin surges 35% as Elon Musk's Twitter deal approaches close

Dogecoin, the cryptocurrency branded aft a viral canine meme from 2013, is up 35% since Monday arsenic Elon Musk's woody to bargain Twitter approaches a close.

The terms of the token often moves successful lockstep with comments made by the Tesla CEO. Doge is up 10% successful the past 24 hours aft the SpaceX main changed his Twitter bio to "Chief of Twit" connected Wednesday. Similarly, the meme token saw a terms surge successful April erstwhile Musk archetypal floated the thought of adding dogecoin arsenic a outgo method for Twitter's subscription service, Blue. It besides saw a sell-off successful June arsenic Musk tried to backmost retired of the purchase.

But pursuing a monthslong conflict betwixt Musk and Twitter implicit the sale, each signs constituent to Musk closing the woody by his deadline of 5 p.m. connected Friday. The alternate is Musk facing proceedings successful a Delaware courtroom.

The terms surge successful dogecoin — pronounced "doje coin" with a brushed "g" dependable — besides coincides with rumors that Twitter is prototyping its ain crypto wallet.

Jane Manchun Wong, a popular tech blogger known for her prescient calls successful the space, tweeted connected Monday that Twitter was "working connected a 'wallet prototype' that supports 'crypto deposit and withdrawal.'"

"We don't cognize which benignant of cryptocurrency volition beryllium supported yet, oregon which network," Wong told CNBC.

Twitter has not announced a cryptocurrency wallet product, but the societal media institution did rotation retired a tipping diagnostic past year, which allows users to nonstop creators bitcoin via the platform. In February, Twitter added ether to its tips function.

It isn't wholly wide erstwhile oregon wherefore dogecoin captured the bosom of Elon Musk. The billionaire Tesla and SpaceX CEO has spent years talking up the token. 

Musk's tweets with sometimes oblique references to dogecoin person often sent it to new record-high prices. These posts person besides helped thrust retail capitalist interest.

"You person this 1 feline who is benignant of similar the cult leader," said Asheesh Birla, a wide manager astatine Ripple, which manages an alternate cryptocurrency utilized for payments.

Musk, however, isn't unsocial successful his personage endorsement of the animal-branded token. Dallas Mavericks proprietor Mark Cuban, Snoop Dogg and Kiss bassist Gene Simmons person each publically rallied down dogecoin successful the past. Even beef jerky marque Slim Jim got successful connected the enactment astatine 1 point.

Doge's terms surge successful 2021, attributed by 1 analyst to the run-up to Musk's "Saturday Night Live" quality connected May 8, 2021, adjacent managed to crash Robinhood's trading app.

But determination was much to dogecoin's grounds terms tally than conscionable personage backing. There has besides been the enduring sentiment to "stick it" to the establishment. 

"Dogecoin is similar this benignant of large F-U to the system," said Avi Felman, Head of Trading astatine BlockTower Capital. "It's like, 'Yeah, this happening tin person value, too. And I'm conscionable going to bargain it, due to the fact that I'm going to bargain it.'"

"Elon is fundamentally pushing up this connection of, 'Why can't dogecoin person value?'" said Felman of doge's 2021 terms rise. "People similar these narratives. They similar these stories. They similar these jokes. And dogecoin conscionable captured the caput and imaginativeness of each azygous retail investor."

"You person a rabid online community," Birla said of the instrumentality basal of doge evangelists.

In 2013, bundle engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency arsenic a mode to marque amusive of bitcoin and the galore different cryptocurrencies boasting expansive plans to instrumentality implicit the world. 

"You person Twitter and Reddit, wherever they're each benignant of congregating and reasoning astir however to pump dogecoin," said Birla.

The question of whether dogecoin holds worth is debatable.

At the moment, determination are precise fewer usage cases for the token. Though more merchants began to accept dogecoin arsenic a method of outgo past year, it is obscurity adjacent the level of adoption indispensable to beryllium utilized arsenic immoderate benignant of existent currency substitute. 

"These days it's each 1 large selling ploy," Mike Bucella, BlockTower Capital wide partner, antecedently told CNBC.

Unlike rival cryptocurrencies specified arsenic ether, which fto programmers physique applications connected their level to bash things similar lend and get money, determination isn't overmuch anyone tin bash with dogecoin.

Dogecoin isn't truly a reliable store of wealth either, fixed that this typically requires a definite grade of semipermanent religion successful the coin and the blockchain upon which it's been built. 

"If you look astatine the dogecoin protocol itself, I don't adjacent cognize if there's anyone implicit the past respective years who has added caller functionality oregon codification to it," said Birla. "Dogecoin doesn't truly person a improvement squad down it."

Given these limitations, the run-up successful dogecoin appears to beryllium purely speculative. Dogecoin has worth due to the fact that different radical judge that it has worth — and due to the fact that they judge that idiosyncratic other is consenting to bargain it from them astatine a higher price.

Disclosure: "Saturday Night Live" is simply a TV amusement of NBCUniversal, the genitor institution of CNBC. CNBC owns the exclusive off-network cablegram rights to "Shark Tank," which features Mark Cuban arsenic a panelist.