A tweet from Elon Musk saying Tesla would accept Dogecoin payments caused the value of the cryptocurrency to rise by 23% this week. The Tesla CEO has long been a fan of Dogecoin and his latest tweet also led many to hope that Bitcoin payments may soon be reintroduced at the electric car manufacturer.
Musk tweeted that, ‘some merch’ at Tesla will be buyable with Dogecoin and the company would monitor the success of the experiment from there. Tesla had previously accepted payments with Bitcoin, but had abandoned the crypto after fears about Bitcoin’s negative environmental impact.
Musk has long been known as being a fan of Dogecoin and went as far to call it his favorite digital coin. As such, his enthusiasm for Dogecoin has transformed the fortunes of the crypto from being an in-joke to a valuable asset. The Tesla CEO stated that Bitcoin lacks the fundamental requirements to substitute regular transactional currencies, while Dogecoin is ‘better suited for transactions’ as it encourages people to spend it rather than hoard it like they would with Bitcoin.
While Musk’s endorsement is incredibly valuable, it hasn’t stopped Dogecoin from suffering from the volatility familiar to most cryptocurrencies. While the crypto was being traded by as much as $0.74 last May, it has since sunk to lows of just $0.17 since the start of December.
Musk’s enthusiasm for Dogecoin has also seen the entrepreneur being criticized for market manipulation. After all, a single tweet from Musk saying the word, ‘Doge’ was enough to cause the crypto’s value to rise by 20% in December of last year. Plus with lots of other unusual activity such as an endorsement on Saturday Night Live as well as a rideshare mission on SpaceX being funded with the crypto, it seems that Dogecoin has a celebrity backing like no other.
The crypto was originally created in 2013 by Jackson Palmer and Billy Markus as a joke regarding the wild speculation in cryptocurrency markets. It doesn’t feature a supply cap like Bitcoin, and there will be five billion Dogecoin released each year. Now it appears that the original meme-coin is starting to be taken much more seriously and could once again make that much-anticipated move towards the one-dollar mark.
Good news for other cryptocurrencies
It’s not just Dogecoin that could benefit from Tesla’s positive move. Many crypto analysts have suggested that other cryptocurrencies such as Bitcoin could soon be accepted by the electric vehicle manufacturer. Bitcoin was only accepted by Tesla for a couple of months earlier this year, before environmental concerns put the crypto out of usage.
Above all, it is the continuation of a growing trend for cryptocurrencies to gain acceptance in mainstream spheres such as corporations, exchanges or even entire countries like El Salvador. All of which suggests that this once-joke of a crypto is now opening doors for many other cryptocurrencies.