In Wall Street Warriors, students write about important aspects of the finance field as well as news in the stock market. This week, sophomore Bennett Szafranski discusses Elon Musk’s appearance on SNL and how it affected Dogecoin.
Last weekend, Elon Musk hosted an episode of Saturday Night Live. Many people believed he would promote the cryptocurrency Dogecoin while hosting, since he has repeatedly endorsed it on his Twitter. The Tesla CEO mentioned the cryptocurrency in a few segments throughout the night. Musk’s appearance boosted the show's rating, while simultaneously lowering the worth of Dogecoin.
Musk also revealed during the episode that he has Asperger Syndrome, a developmental disorder affecting the ability to effectively socialize and communicate. He has founded several extremely successful businesses and is one of the richest people in the world. Many were able to appreciate his success after learning more about his life.
Moreover, in the Weekend Update segment, Musk explained what Dogecoin actually is, stating, “It's the future of currency. It's an unstoppable financial vehicle that’s going to take over the world”. The host, Michael Che, replied asking “So it’s a hustle?”, to which Musk replied, “Ya, it’s a hustle” and laughed it off. This caused the currency to drop as low as forty cents, resulting in an increase of sales.
Before the show, Dogecoin was priced at sixty-five cents, but then fell nearly forty percent as the night progressed. Many are claiming that is a result of Musk’s comments, while many believe it is a classic case of “buy the rumor, sell the news”. In simple terms, this means that an investor buys the security leading up to the news and sells it once the market finds out and reacts to it.
As of now, Dogecoin is around fifty cents and is slowly getting closer to its all-time high. Even with this recent drop, Dogecoin is still up nearly 10,000 percent this year, making it one of the highest market capitalizations of all cryptocurrencies.
On the bright side, Musk’s appearance on the show provided a boost in ratings. Nearly five percent of homes with a television watched SNL last saturday night, a thirty-three percent increase from the previous episode.
The fact that Dogecoin dropped based on a comedy show, not an infomercial, is astounding. Those who were expecting Musk to boost the crypto were wrong. As of now, Dogecoin is priced around fifty cents, and it will be very hard to predict what could happen next for the cryptocurrency.
Bennett Szafranski (10th Grade)