What happened
As the cryptocurrency market settles down from yesterday's rally, most investors are seeing relatively flat, or slightly negative, performance in their portfolios today. That said, one standout token continues to break out: Dogecoin (DOGE -11.58%) has surged 14.1% over the past 24 hours, as of noon ET.
This impressive move follows Elon Musk's surprise arrival at Twitter (TWTR) headquarters yesterday. Carrying a kitchen sink and subsequently prompting employees and investors to "let that sink in," Musk appears to be taking a lighthearted approach to finalizing his deal to buy Twitter at $54.20 a share. Shares of TWTR stock are currently trading just shy of $54 per share, signaling this deal has a high likelihood of completing by Friday's deadline.
For Dogecoin investors, questions of whether Musk would ultimately follow through on his pledge to buy Twitter at the aforementioned price of $54.20 provided a great deal of volatility to both Twitter and Dogecoin, with the latter being viewed as a beneficiary of Musk controlling Twitter.
So what
Musk's deal to buy Twitter has been in doubt in recent months, with Musk backing down months after proposing an offer to Twitter's board that was too good to refuse. Noting concerns around bots, spam, and fake accounts, Musk canceled his deal on July 8. This sent shares of Twitter plunging, and Dogecoin followed.
However, following some impressive legal pushback from Twitter, Musk ultimately capitulated. His reason for the acquisition, as stated in a Twitter note to advertisers, has always been to create "a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence." These goals were "important to the future of civilization," meaning that his overpaying for Twitter may be a small price to pay to further what he believes are altruistic goals.
The exact reason why Dogecoin is rocketing higher in the fashion it is remains unclear. Yes, Elon Musk has provided Dogecoin with plenty of supportive tweets in the past. However, his explicit references to Dogecoin have died down quite a bit of late.
Now what
Perhaps holding the reins to this multibillion-dollar social media platform will allow Elon Musk to comment on his favorite subject matters in a more uninhibited fashion (as if that was a problem to begin with). For Dogecoin holders, any sort of reference or mention from Elon Musk has proven to be a catalyst that can take this token higher. Accordingly, given the speculative nature of Dogecoin, it's clear that traders are looking to capitalize on the reality that this deal is likely to go through.
That said, we're talking about Elon Musk here. The deal isn't done until all the papers are signed and approval is granted. Thus, the story isn't over yet.
