Dogecoin Is Spiking Thanks to Tesla’s Elon Musk, the Dogefather – Barron’s

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What do the the Tesla CEO and Technoking, SpaceX chief engineer, as well as the Imperator of Mars all have in common? They are all titles held by one person: Elon Musk.

Now Musk followers can add Dogefather to his list of titles. Musk tweeted that out Wednesday, referencing again the meme-fueled crypto currency Dogecoin as well as his upcoming appearance on Saturday Night Live.

The tweet isnt much, but Dogecoin is rallying anyway, up about 15% to 31 cents in Wednesday trading.

The frequency and tone of Dogecoin tweets from Musk are about all the fundamental analysis anyone can do regarding the crypto currency. Musk is no stranger to cryptos and made waves when Tesla (ticker: TSLA) invested $1.5 billion in Bitcoin and, soon after the investment, announced customers could pay for vehicles in Bitcoin.

Thats part of Musks corporate life. Personally, he has an affinity for Dogecoin, and he has tweeted about it frequently.

Bitcoin is far larger and more significant than Dogecoin. The total market value of Dogecoin is about $40 billion. The total market value of Bitcoin is about $1 trillion. Size and trading liquidity are two reasons Tesla decided to invest in Bitcoin. As for Dogecoin, being smaller means it takes less volume to move prices around. Thats why tweets cause large price spikes.

Bitcoin bulls believe its use as a store of value, like gold in the past, will grow, helping to push up prices. Its hard to say now what will drive Dogecoin in the future, apart from what Musk will tweet next.

Write to Al Root at allen.root@dowjones.com

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Dogecoin Is Spiking Thanks to Tesla's Elon Musk, the Dogefather - Barron's