Dogecoin losses 20% with Elon Musk reversing course

By Ovunc Kutlu

ANKARA (AA) - Dogecoin lost 20% of its value as of Monday with American business mogul Elon Musk reversing course about the cryptocurrency that he has supported for almost a month through social media.

The world's richest person has been repeatedly posting tweets in favor of Dogecoin since Jan. 28. The virtual coin with a small market cap saw its value gain more than 800% since then.

The Tesla CEO even said last Wednesday he bought some Dogecoin for his 9-month old son, X Æ A-12, announcing his almost 47 million Twitter followers, "Bought some Dogecoin for lil X, so he can be a toddler hodler."

Dogecoin's market value surpassed $10 billion last Monday as it became the world's eighth largest cryptocurrency by market cap then. This amount was greater than 170-year-old financial services and communications firm Western Union, or sports equipment manufacturer Under Armour that has been in the market for 25 years.

Musk, however, took a stance against the crypto late Sunday, writing on Twitter "If major Dogecoin holders sell most of their coins, it will get my full support. Too much concentration is the only real issue imo."

While Dogecoin's market cap shrank to around $7.5 billion on Monday, its price is down almost 27% to $0,0575 on Monday from its all-time high level of $0,0787 last Tuesday.

Musk, a crypto-enthusiast, seems to have shifted his focus to the world's largest virtual coin. After writing "Bitcoin" on his Twitter profile page on Dec. 29 the world's largest crypto by market cap saw its price to climb over $38,000 in a single day.

After Musk's Tesla said last Monday it has bought $1.5 billion worth of Bitcoin, it has continued its increase to touch almost the $50,000 psychological mark during the weekend with a market cap of nearly $ trillion.

Major cryptocurrencies, including Bitcoin and Ethereum, were all on decline ranging between 2% to 10% Monday due to some correction from their recent rally.

The crypto market's high volatility is most evident in Dogecoin, which was initially created as a joke by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer.

In the early 2010s, many Bitcoin fans with computer engineering backgrounds were creating their own virtual moneys that could potentially find popularity, such as Dogecoin that was introduced in 2013.

Unlike Bitcoin, however, Dogecoin does not have any limit on its mining, or the amount that is created, which could make its price even more volatile since its amount that can circulate the crypto market does not have a certain cap.