Did Elon Musk Sell His Dogecoin?
Since Elon Musk’s involvement in the crypto space, Dogecoin has been one of the industry’s hottest memes to circulate. Could it be that the Tesla CEO sold all his Dogecoin or that he is holding the gains made from his investments? If you are a crypto enthusiast or even a casual investor it is important to understand the implications this might have on the wider market and the potential effects on your own portfolio.
Musk’s first public address indicating he had Dogecoin holdings came in 2018 when he posted a tweet doting on his now famous “Doggies.” Since then, Dogecoin has gone from low ride on the crypto market to one of the industry’s hottest assets. Since his tweet, Dogecoin has increased in value over 6 000%.
As with any asset held on the Bitcoin and Ethereum networks, Dogecoin holders are often concerned about securing their holdings assuring the adequate measures are taken to store the coins. To make sure that the coin remains safe, many people employ a hardware wallet provider, such as Ledger or Trezor, to make sure their coins are always stored securely. It is also believed that Elon Musk also followed this path.
It is no wonder that the implication of Musk’s potential move to cut his Dogecoin holdings has raised concerns. When news spread of this potential move, the crypto markets were rocked and many began speculating on how this would affect prices. Although many struggled to identify the true reason behind the sell off news, many argued that it could be that the Tesla founder is likely cashing out to prevent complications with the Security and Exchange Commission (SEC), himself being a Tesla board member.
Crypto experts, like Graham Stanley, believe that the impact the Tesla founder had on Dogecoin was lucrative but short-lived. Stanley argued, “It’s possible that his involvement was short-term and he’s looking to cash out gains now that Dogecoin has become so highly valued.” If this is the case, it is unlikely that Musk’s departure from the Dogecoin bandwagon will have permanent effects.
Robert Bartolo, a co-founder at CryptoPoros, compares the potential move to a classic hedge. He argued that the rumours of Musk’s offloading of Dogecoin is “a perfectly normal hedge move.” He advices investors to use other stocks and assets to hedge their bets.”
Overall, there are conflicting views on Elon Musk’s potential sell off of Dogecoin and the cryptoverse is diverse in opinions on the matter. Perhaps before one can fully form an opinion you will need to monitor the news of whether Mr Musk actually goes ahead in selling his Dogecoin.
The Response of the Crypto Community
The news of Elon Musk’s possible sell off of Dogecoin has been met with responses from both sides of the spectrum. While some of the crypto community applauded the move, expressing it as a bold decision to ensure that Musk remains compliant with the SEC, others were not so kind. Some argued that this move would be detrimental to the success of the coin, which had benefited significantly from the Tesla CEO’s influence.
That was further buttressed by the fact that the coin’s price had decreased significantly after the news, both in US Dollars and Bitcoin, showing that investors were less than enthused with the proposed move. Another consequence of the news were the barrage of memes expressing the crypto community’s confusion of the news in true internet fashion.
Notwithstanding, some of the more reasoned members of the community saw the potential for growth for the coin and cashed in on the dip, which was a silver lining for some investors. All in all, the crypto community’s initial response to the news could be best described by its diversity in opinion, with some in favour and others against the move.
Will Musk Sell His Dogecoin?
Tesla CEO Elon Musk has not made a move on his Dogecoin holdings yet and, given his recent stance on cryptocurrencies, the chances that he sells off his stake are increasingly slim. Despite this, the community’s expectations and potential news has, nonetheless, influenced the price of the coin and one can see an interesting reaction to the news.
For starters, Dogecoin prices have been in flux ever since the news was released, with some seeing a huge upswing while others have seen a severe downturn. As a result, one can expect the coin to remain risky, especially if Musk does decide to sell his holdings in Dogecoin. That said, it is likely that investors will remain on the side of caution until a more concrete decision is taken.
Moreover, since the news, Ethereum and other more conservative assets have started to make a comeback, indicating that investors are hedging their bets away from Dogecoin and other less conventional coins. Such a move could potentially be attributed to the news of Musk’s Dogecoin activities.
Will It Have Permanent Effects on Dogecoin?
If Musk decides to sell, it is likely the move will have some effect on Dogecoin, although it might not have a long-term impact. What this would mean is that the coin’s price could rise and fall a few times as investors process the news and attempt to understand its implications.
In the short-term, it is likely that the coin’s price will drop significantly as investors respond to the news. However, if the Tesla CEO’s departure proves to be no more than a ‘hedge move’, it is likely that the drop in the coin’s price will be relatively short lived. Ultimately, the truth of the matter is still not known and investors will have to closely monitor the situation to make an informed decision.
Musk’s Influence
Whether Elon Musk makes a long-term decision or not, it would be foolish to discount the Tesla founder’s influence on the cryptoverse. Ever since state-backed digital assets began gaining attention, Musk’s opinion has been particularly highly valued by the crypto community.
Indeed, prior to the news of his possible Dogecoin sell-off, the Tesla CEO had largely been an advocate for decentralised assets. So, even if he were to sell off some of his Dogecoin, the extent of his influence cannot be understated.
Price Capping
Despite the impact Musk’s selling might have on the coin, it is likely that the coin will not experience significant price swings in the long-term. For example, traders will begin to realise the upper cap on the coin, given that it is largely a meme and so only has so much potential in terms of value.
Moreover, the health of the crypto need to be taken into account. Many argue that certain coins, such as Dogecoin, could experience a “bubble”, given their meteoric rise. If this is true, it is likely that Dogecoin, or any other cryptocurrency, will experience a downturn at some point, regardless of what the Tesla CEO’s decision is.
Analysis of the Situation
In theory, it could be said that Musk’s sell off decision could act as a catalyst for Dogecoin, as the coin could experience a significant decrease in price as investors react. This could result in a considerable upward trend for Dogecoin and other cryptocurrencies alike, as those who jumped on the earlier dip could experience significant gains.
Additionally, if the coin does experience a brief dip it could be a signal to investors that the coin has reached its peak and the coin’s price could start to normalise and levels out. At this point, investors and traders will have to be patient and monitor the situation to establish if the coin’s current price is an indication of long-term stability or if there will be further spikes.
Conversely, there could be consequences to Musk’s current stance. For example, if the Tesla CEO were to distance himself from Dogecoin, investors may view the coin’s long-term potential with less enthusiasm and the coin’s value could start to decrease instead. The outcome of this situation remains to be seen and investors and enthusiasts alike will have to monitor the news regarding Musk’s sell decision.
