Dogecoin (DOGE) increased by more than 20% on Sunday after Billionaire Elon Musk tweeted that he would “keep supporting Dogecoin.” In response to a follower who told him to “Keep buying it then,” Musk replied, “I am,” implying that he had been amassing the meme coin all along.
Elon’s comments come just a week after a $258 billion class-action lawsuit was filed against the Tesla CEO, Tesla, and SpaceX for allegedly running a cryptocurrency pyramid scheme. Elon was accused of inflating dogecoin and 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, accused Musk of abusing his position as the World’s Richest Man by running and manipulating the Dogecoin Pyramid Scheme for profit, exposure, and amusement.
Keith and the represented class claimed that as a result of Elon’s dogecoin influence, they had lost approximately $86 billion since 2019. Keith also requested that the court award the plaintiffs $172 billion in triple damages.
Dogecoin, which began as a joke in 2013 to mock Bitcoin, has steadily risen from an obscure “meme coin” to one of the largest cryptocurrencies. At one point, the coin’s market cap surpassed $88 billion, surpassing a list of well-known S&P 500 companies.
Elon Musk publicly joined the Doge bandwagon in 2019 and had always been one of its most vocal supporters. The Tesla CEO has repeatedly tweeted about his love for Dogecoin in an attempt to “moon” the cryptocurrency’s price. Binance CEO Changpeng Zhao “CZ” once warned Musk against using his position of power to manipulate prices because many people relied on his investment advice.
Perhaps taking a more cautionary approach, Musk began promoting the meme coin objectively, complimenting it for being carbon-friendly and having low transaction fees compared to other cryptocurrencies like Bitcoin. He would later try to back up his claims by implementing doge payments for Tesla merchandise, with plans to expand to SpaceX and Starlink. Mark Cuban, the owner of the Dallas Mavericks, is another billionaire who has publicly supported DOGE.
Dogecoin is currently trading at $0.06 after surging in response to Musk’s comments. However, the price is still 90% lower than its all-time high of $0.73 in May 2021. Doge is currently the tenth-largest cryptocurrency, with a market cap of $8 billion.