Tesla (TSLA, Financial) founder Elon Musk has taken a significant role in the newly established "Department of Government Efficiency," announced by former President Trump. The department aims to streamline bureaucracy, reduce regulations, and reorganize federal agencies. Interestingly, its abbreviation, DOGE, coincides with the popular cryptocurrency Dogecoin, leading to a market stir and a 20% surge in Dogecoin's value. Since the election, Dogecoin has climbed by 153%, outpacing Bitcoin's 30% rise. This surge has propelled Dogecoin to become the sixth-largest cryptocurrency by market capitalization.
Musk, a known supporter of Dogecoin, has played a crucial role in its market attention, with social media activity further boosting its profile. In May 2021, Musk's tweets helped push Dogecoin to an all-time high of 67 cents, despite later calling it a "hustle" which led to a price drop.
Cryptocurrency stocks such as Coinbase (COIN) and MicroStrategy (MSTR) did not fare as well, with both experiencing declines in post-market trading. However, Dogecoin's rise is attributed to several factors: the expected pro-cryptocurrency policies under Trump's influence, improved investor sentiment, technical analysis showing price breakthroughs, and active discussions on social media.
Experts predict that continued support for cryptocurrencies could maintain Dogecoin's growth in the coming weeks, yet investors are advised to remain cautious due to the market's inherent volatility.
