Dogecoin rallies 30%, what does Musk's purchase of Twitter imply for Bitcoin?

The news that Twitter finally accepted Elon Musk's offer to buy the microblogging social network for 44 billion dollars has sent a wave of purchases to the cryptocurrency market, which has recovered its recent losses and left rises as spectacular as Dogecoin´s. The 'cryptomeme', Tesla's CEO´s favourite, rallied 26% on Monday after hearing the news and accelerated its performance to rises of 30% during the last 24 hours, while the rest of the market is dyed green and shows advances of between 7%, like Ethereum or Terra, to 2%, like Avalanche or Ripple. The total capitalization is back over the $1.87 trillion mark.

Meanwhile, Bitcoin managed to reverse recent losses that saw the queen of cryptocurrencies fall to more than one-month lows at $38,338 (according to CoinMarketCap data). However, the pull from Musk and Twitter managed to lift its price to the important $40,000 mark, which it is battling with on Tuesday in a clear consolidation move. Ethereum performed similarly and rebounded from its recent fall to a March 18th low of $2,804. The second-largest coin by market capitalization reconquered $3,000.

Investors jumped into the crypto market after a week in which the statements of the president of the Federal Reserve (Fed) of the United States, Jerome Powell, anticipating a much tougher monetary policy of the world's largest central bank, caused the prices of these assets to closely follow the traditional markets, that suffered significant sales. Buying came on the back of anticipation of policies Musk may implement on Twitter, which are seen as potentially positive, as the Tesla CEO is a known advocate of digital currencies.

Experts praise the operation as there could be fewer 'spam bots' and that means fewer thefts and scams tarnishing the cryptocurrency industry. Also, converting Twitter's algorithm to open source to build trust is a step towards concepts similar to 'cryptos'. On the negative side, analysts question whether forcing human authentication somehow takes away the privacy and anonymity that makes the social media platform unique from its competitors.

The deal could have wider implications for the stock market and cryptocurrencies in terms of appreciation as well, as this event and other favorable news coming out of it could be the spark that starts a new bull cycle for crypto assets. Analysts point out that it was Musk's Bitcoin purchase announcement that triggered buying last year to all-time highs in the vicinity of $69,000 and do not rule out the market taking this move as a further indication that the cycle is not over.

For just over 12 months, the also Space X CEO took it upon himself to pump asset prices using his Twitter platform. Nicknamed the 'Dogefather' he drove the meme currency almost to $1. And after fueling the cryptocurrency's tremendous rally from $30,000 in 2021, he was the one who threw the first stone and kicked off the bearish phase of stocks and cryptocurrencies.

Could he now be the one who kicks off the next upward momentum? The U.S. stock market experienced one of the biggest one-day gyrations in a long time. Bitcoin, which was expected to fall below $30,000, climbed back above $40,000. Twitter's $43 billion deal may have put an end to the recent carnage in the stock market and cryptocurrencies, some analysts state.