On Sunday, Dogecoin (DOGE) sprung up over 10% following a tweet by Billionaire Elon Musk stating that he would “keep supporting Dogecoin.” In a subsequent reply to a follower who told him to “Keep buying it then,” Musk said “I am,” suggesting that he had been accumulating the meme coin all along.
Elon’s comments come barely a week after a $258B class-action suit was filed against the Tesla CEO, Tesla, and SpaceX for allegedly running a pyramid scheme around the cryptocurrency. According to a Thursday report by Bloomberg, Elon was being accused of pumping dogecoin as well as running a racketeering scheme through his companies to back the cryptocurrency.
“Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.” Keith Johnson, who brought the class-action suit said in the complaint. He further accused Musk of using his pedestal as World’s Richest Man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement.
As a result of Elon’s dogecoin influence, Keith and the represented class claimed that they had lost approximately $86 billion since 2019. Keith also asked the court to award the plaintiffs $172B in triple damages.
Originally designed as a joke in 2013 to poke fun at Bitcoin, Dogecoin had steadily risen from being an obscure “meme coin” to being one of the largest cryptocurrencies. At one point, the coin’s market cap topped $88 Billion eclipsing a list of well-established S&P 500 firms.
Elon Musk publicly joined the Doge bandwagon in 2019 and had until its prime been one of its biggest promoters. On numerous occasions, the Tesla boss has posted tweets aimed at “mooning” the crypto’s price. At one time, Binance’s CEO Changpeng Zhao “CZ” cautioned Musk against using his position of influence to manipulate price as many people relied on his investment advice.
Perhaps taking a more cautionary approach, Musk started promoting the meme coin objectively, praising it for its carbon-friendly and low transaction costs compared to cryptocurrencies like Bitcoin. He would later strive to back his claims by rolling out doge payments for Tesla merchandise with plans to add the same to SpaceX and Starlink. Other billionaires who have publicly supported DOGE include Dallas Mavericks owner Mark Cuban.
As of writing, Dogecoin is trading at $0.057 after surging on Musk’s comments. However, the price is still down 92% from its $0.73 all-time high in May 2021. Currently, Doge is the tenth-largest crypto with a market cap of $7.6 billion.