Not Funny Enough?
For the last few weeks, people ranging from comedy fans to financial analysts have been anticipating Elon Musk’s performance in the show ‘Saturday Night Live’, a weekly program that makes all of us laugh with skits. However, no one has been following it as much as Dogecoin traders. Yes, Dogecoin traders, and for good reason too. Elon Musk has been vital for Dogecoin’s rapid rise, tweeting pictures of the iconic Shiba Inu dog and simply using the word “Dogecoin” in social media or a statement. Dogecoin was built off a meme, so it was highly likely that it would be used by Musk during his performance, which had many dreaming of how high the price would jump.
I am happy to report to you that he mentioned it. Not once, but twice. In Musk’s monologue, his mom, Maye, made an appearance and a joke did not come until the end, where he said that his Mother’s Day gift for her is Dogecoin. Next, it was on the show’s famous segment, Weekend Update, where Elon acted as the show’s financial expert, Lloyd Ostertag. Hosts Michael Che and Colin Jost were asking him what Dogecoin was, and when he explained that it can be traded for a dollar, Che called it a hustle, which made all 3 of them laugh.
With two references, the price must be at 2 dollars, right? Well, not exactly. After Musk’s first mention of Dogecoin, the price fell from 63 cents to 54 cents, marking a rapid fall. It continued to sell off, with the low being 41 cents, representing a 35 percent decrease. Shorts were rewarded nicely, but many retail investors were confused. The likeliest explanation was not Elon’s comments, but instead something we witness often in the stock market. I’m sure you’ve heard of “buy the rumour, sell the news”. This fits perfectly with what happened as the price of Dogecoin went up by more than 100 percent during the week leading to Musk’s appearance, but when it happened, the price decreased. It occurs in regular assets also, with many companies experiencing this in the weeks leading up to their earnings. If people are expecting something to happen, they will price it into the stock, which has been a common theme for the general market since March. Now that the SNL performance is over, do you think this is it for Dogecoin?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
