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Elon Musk hustle comments torpedo dogecoin but no contagion effect

Meme-based crytocurrency dogecoin has rallied by an astonishing 11,900% year-to-date, from a low of $0.0046 at the start of the year to an all-time high of 0.7605 on 8 May, before Tesla CEO Elon Musk’s Saturday Live Night TV debut. Its tremendous return had surpassed Bitcoin/USD (+103% year-to-date) and Ethereum/USD (+437% YTD), plus all other financial assets so far in 2021.

Given such a winning streak in dogecoin’s upside momentum, it has attracted lots of traders’ attention, and particularly millennials who tend to have a closer association by its meme-based satire, and have organised 'watch parties' to hear any positive comments on dogecoin from Elon Musk and other ahead of Saturday's TV appearance.

Given such optimism, the risk of the aged old “buy the rumour, sell the news” behaviour increases and when Elon Musk’s lacklustre “hustle” comment on dogecoin came out, it plummeted by 33% to $0.46. The major cryptocurrencies did not follow suit, with ethereum rallying 2.9% over the same period to print a fresh all-high of $3,980 over the weekend. The plunge in dogecoin therefore does not seem to be having a contagion effect on the rest of the major cryptocurrencies at this juncture.