Bitcoin lags behind Dogecoin as it soars. Of course, I want to thank Elon Musk again.

In Tuesday's digital asset market, DogecoinDOGEUSD +9.11% stood out, as it ran higher to start the week after falling more than 28% since FTX's bankruptcy in June.

‍

Dogecoin's price spike can be attributed to Elon Musk as usual.

‍

A 9% increase in Dogecoin's price between Monday and Tuesday was led by BitcoinBTCUSD +1.65%, which fell as much as 5% on Monday, the most since the FTX bankruptcy on Nov. 11. It then rebounded somewhat on Tuesday. After one of the best starts to a year on record, crypto traders are bracing for the Federal Reserve's interest-rate decision on Wednesday.

‍

The dogecoin is referred to as a memecoin due to its original design as more of an internet joke than a serious blockchain project, referring to a dog meme featuring a Shiba Inu. Shiba Inu, currently the 14th-largest digital asset, is the ninth-largest cryptocurrency and its spinoff has inspired dozens of new tokens. Despite a sea of red across the crypto landscape, Shiba InuSHIBUSD +3.76% was buoyed alongside Dogecoin on Tuesday.

‍

Dogecoin prices spiked after a Financial Times report revealed that Elon Musk, the Tesla CEO who bought Twitter last year, is exploring ways to expand payments on Twitter.

‍

The FT report cited multiple anonymous sources familiar with the matter in reporting that Musk is considering allowing Twitter users to pay each other, reward creators, and purchase items through the platform. According to the report, Musk wants a fiat payment system first and foremost that supports the dollar as well as other currencies, but it should be designed so that crypto functionality can be added later if needed.

‍

In spite of the fact that Dogecoin typically trades in step with other cryptos, it has established a history of rallying on news linked to one individual-Musk, who has been associated for years with the 'jokey' crypto. Saturday Night Live has tinkered with Dogecoin's price by referencing it in tweets and by hyping it through tweets.

‍

But since Musk made a bid for Twitter in early 2022, those rallies have become a bit more material. It was Musk's acquisition of Twitter-an outspoken proponent of cryptocurrencies-that inspired hope that cryptos, and especially Dogecoin, would be put to legitimate use, and that prices would rise.

‍

The price spikes associated with speculation and optimism have mostly been followed by a subsequent fallback. Since November alone, Dogecoin's value has fallen more than one third from its May 2021 record high.

‍

In light of cryptos' eye-popping start to the year, the latest jump could be more of the same. Musk may, however, prove the Dogecoin die-hards wrong at some point.