3 months ago 2 min read

This Week, Dogecoin (DOGE) Sees a Little 6% Rise: Why?

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In the middle of a turbulent time for the cryptocurrency market, Dogecoin's (DOGE) price has seen a tiny upward rise, giving its supporters hope. The meme-inspired digital currency increased by 6% earlier today.

Although if it is only a minor increase, Elon Musk, a millionaire software entrepreneur who has been a loud supporter of the cryptocurrency lately, may be somewhat to blame for the current rise in Dogecoin prices.

The market value of Dogecoin has been known to be significantly influenced by Musk's tweets, and he has referred to it as "the people's crypto."

In with some observers, Musk's support for Dogecoin has contributed to its rise in public acceptance, which has increased investment and adoption from both individual investors and institutional players.

Dogecoin Price Increases Due To Billionaire

A recent tweet by Musk appears to have helped the meme-inspired cryptocurrency Dogecoin.

Musk tweeted: "Sure, but it will cost 3 Doge" in response to a user's tweet about traveling to the United States to attend SpaceX's forthcoming Starship launch.

OK, but it will set you back 3 Doge. — Elon Musk, March 23, 2023 (@elonmusk)

The value of Dogecoin significantly increased soon after Musk's post, with the price climbing 6% to reach $0.0785 on an hourly chart. However, as of the writing, per the CoinMarketCap, the price has marginally decreased and is currently trading at $0.076.

Fed Increase Causes Prices To Fall

Most cryptocurrencies traded in the red on Wednesday evening after the Federal Open Market Committee (FOMC) made the anticipated decision to hike interest rates by a quarter percent.

DOGE fell by 2.63% in the past day to trade at $0.073, while Bitcoin (BTC) and Ethereum (ETH) both fell by 3.31% to trade below $1,800.

People shifting their money from low return savings accounts to high interest money market (Treasury Bill) accounts is a major factor in depositor flight. This stupid rate increase will make depositor flight worsen.— Elon Musk, March 22, 2023 (@elonmusk)

Musk immediately criticized the Federal Reserve's decision in response to the rate increase, expressing worries that it might cause a significant exodus of bank depositors and make it more difficult to manage the ongoing economic crisis, creating problems for both policymakers and the banking sector.

People shifting money from low-interest savings accounts to high-interest money market (Treasury Bill) accounts is a big cause of depositor flight, Musk tweeted. "This stupid rate increase will make depositor flight worse."

The Federal Reserve's decision to increase its key interest rate demonstrates how uncomfortable it is with the persistent inflationary pressures. Fed Chair Jerome Powell stressed the need for the central bank to restore inflation to the desired 2% rate in a statement.

The Fed acknowledged that the recent banking crisis could have unintended consequences, including tighter credit access for both individuals and companies. The Fed believes that these elements may thereby temper inflation, employment growth, and economic expansion.

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