The US Federal Reserve raised interest rates by 25 basis points yesterday, in line with expectations. This triggered a rise in risk assets as it raised expectations that the Fed will begin to soften. Tesla CEO Elon Musk, whose name is associated with the popular meme coin Dogecoin (DOGE), warned investors.
Warning to investors from DOGE fan Elon Musk!
cryptocoin.comDogecoin (DOGE) is on the rise after a report from the Financial Times that Elon Musk is considering adding a payment system to Twitter. This fueled speculation that the company might include the altcoin on its social media site. With the aim of creating a new revenue stream for the platform, Twitter has begun applying for regulatory licenses and designing the software needed to initiate payments in the system, the report said.
As it can be understood from here, there is an interesting relationship between DOGE and Elon Musk. That’s why Musk’s rhetoric and actions are closely followed by the DOGE community. Elon Musk shared a warning message on Twitter about investing in stocks and similar risky assets that rose after the Federal Reserve’s interest rate decision:
Avoid using margin loans to buy stocks during turbulent economic times.
‘Musk effect’ continues to fuel DOGE
Sources told the FT that a team at Twitter also created a vault to securely store user data that a payment system would collect. Allowing payments on Twitter is crucial to the company, as its $5 billion-a-year advertising business has taken a hit since Musk bought Twitter in October, with marketers voicing concerns about governance and content control.
Elon Musk has been a high-profile buyer of Dogecoin and has previously supported it as a means of payment. The prospect of a payment option on Twitter sent the meme coin up by up to 10% to its intraday high of $0.095655. However, he later gave back some of his earnings.
Weekly gains for Dogecoin extended the meme coin’s price surge in January and helped boost a 35% increase in the first month of 2023. The move comes amid a wider rally in crypto markets after a dismal 2022. Bitcoin rose almost 40% in January and had its best month since October 2021. The total value of the crypto market regained $1 trillion last week for the first time since the collapse of FTX. Investors are warming to risking assets as falling inflation feeds hopes of the Fed pulling back rate hikes. Elon Musk also warns about this, and recommends not investing in risk assets with leveraged loans.
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