KEY POINTS

  • Elon Musk tweeted a picture of a Shiba Inu dog planting a flag on the moon
  • Dogecoin's price shot up immediately
  • The Tesla founder is a known supporter of the meme cryptocurrency

Tesla founder Elon Musk, who is a supporter of Dogecoin, on Wednesday decided to explain why he liked the cryptocurrency. He took to his favorite platform, Twitter, to do this and the price of the joke cryptocurrency immediately shot up 25%.

Musk first posted a picture of a Shiba Inu dog planting a flag on the moon. It was followed by two tweets that said "Literally" and "On the actual moon."

When a Twitter user asked him why he likes DOGE, he replied, "I love dogs & memes."

The price of Dogecoin, which was on a downtrend since hitting almost $0.09 on Feb.7, suddenly shot up from $0.04 to $0.06 before closing Wednesday at $0.056. 

Musk's tweet about Dogecoin has always moved its price, Markets Insider reported. During the GameStop trading saga, there were some investors who looked at cryptocurrency as the next asset to rally together to push the price up. Dogecoin was the collective choice because of its very low price. When it seemed that the Dogecoin rally was about to run out of steam, Musk tweeted about Dogecoin. With the support of the billionaire, Dogecoin's price almost reached $0.073 on Jan. 29 and $0.088 on Feb. 7.

Other celebrities also gave their support to the Dogecoin rally, including Snoop Dogg and Gene Simmons from the band Kiss. For a brief period, Dogecoin was one of the top 10 cryptocurrencies in the world by market capitalization. Mark Cuban, a judge at "Shark Tank" and owner of the Dallas Mavericks, recently said he bought Dogecoin for his son to teach him about economics.

It's not just the positive comments that had an impact, Musk's negative views reflected negatively on the market. In a tweet on Feb. 15, Musk complained that the existing supply of Dogecoin is concentrated among a few major holders. "If major Dogecoin holders sell most of their coins, it will get my full support," he remarked. Dogecoin dropped 25% on the same day.

Elon Musk, one of the world's richest men and Tesla CEO Elon Musk, one of the world's richest men and Tesla CEO Photo: Creative Commons