Over the last 24 hours, the price of the meme-inspired cryptocurrency Dogecoin (DOGE 1.63%) traded 3.4% higher as of 1:48 p.m. EST today. Speculation has arisen that the token could play a critical role in Twitter's future if Dogecoin bull and Tesla Founder Elon Musk can buy the social media giant. Recently, Robinhood's CEO Vlad Tenev has also talked about how Dogecoin could be more widely used.
The last few weeks have been chaotic for Twitter. Recent Securities and Exchange filings disclosed that Musk had purchased more than a 9% stake in the company, after expressing some of his frustration with the company over free speech issues.
It looked like Musk would join Twitter's board of directors, but then Musk declined and launched a takeover bid for the company in which he offered to buy Twitter for $43 billion. Through all of this, Dogecoin investors were optimistic that Musk's position with the company could lead to some kind of integration of the cryptocurrency on Twitter.
But today, Twitter's board voted to adopt a "poison pill" to prevent Musk from buying the company. Under this plan, the board is allowed to purchase more shares at discounted prices if any one person acquires 15% or more of Twitter's outstanding common shares.
While the "poison pill" might be enough to hold off Musk's bid for now, Musk has said publicly that if his initial offer is rejected he does have a backup plan. However, he did not elaborate.
In other news, Vlad Tenev recently took to Twitter to talk about how Dogecoin could become the future currency of the internet, which may have also sparked some enthusiasm around the token.
The "poison pill" may dampen some of the excitement about Dogecoin and its future with Twitter, although we'll see what Musk's backup plan looks like. If Musk is able to get some kind of influential position at Twitter, I'm sure it might help boost the price of Dogecoin.
However, lacking any real unique advantage over other cryptocurrencies, I still do not view Dogecoin as a good fundamental investment and would tell people thinking about investing to expect lots of volatility and uncertainty.