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Elon Musk pumps Dogecoin, but a lawsuit is lurking

Elon Musk pumps Dogecoin, but a lawsuit is lurking

Elon Musk, the CEO of Tesla and SpaceX, recently expressed his support for Dogecoin (DOGE) in a tweet. "I will keep supporting Dogecoin."

This is not news to the crypto world, as Musk has been arguing his passion for Dogecoin via Twitter for quite some time. The all-time high of DOGE reached in 2021 is therefore largely due to Elon Musk and his tweets. Once again, the richest man in the world managed to make the price of Dogecoin rise by 8% shortly after his tweet.

Bold it is, because, Musk has been sued for $258 billion for manipulating the Dogecoin price. The plaintiff is Keith Johnson, a former investor in Dogecoin, who claims he lost a huge amount of money thanks to Elon Musk.

Johnson claims that investors in Dogecoin have lost more than $86 billion since Musk began promoting the cryptocurrency. He is demanding a total of $258 billion in compensation from Musk on behalf of these investors. The amount includes the estimated losses of $86 billion and an "additional" of $172 billion, which is double the amount of the original loss.

Dogecoin was founded in 2013 and described by its creators as an "ironic response" to cryptocurrencies and a meme image of a Shiba Inu dog.

In 2019, Elon Musk posted his first tweet about Dogecoin:

"Dogecoin may be my fav cryptocurrency."

Musk has advocated for Dogecoin many times after that. He even hinted that the cryptocurrency might be accepted for Tesla cars sometime in the future.

In an interview in February, Musk said, "The transaction value of Bitcoin is low and the cost per transaction is high. At least on a space level, it is suitable as a store of value. But fundamentally, Bitcoin is not a good replacement for transactional currency," he said.

Musk also confirmed that he has a significant personal investment in Bitcoin on top of Tesla's investment and he has smaller Ethereum and Dogecoin holdings.

By the way, it is not expected that Elon Musk will be $258 billion lighter after this lawsuit, but it will certainly be an interesting case to watch. Beyond that, his influence over DOGE seems to be diminishing each time the crypto market as a whole does not perform well.

Luc Smits van Oyen
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