Elon Musk sparks 20% dogecoin price rise after Tesla announcement
The CEO and co-founder of Tesla, Elon Musk, has made waves in the cryptocurrency market after announcing on Twitter that his electric car company still start accepting dogecoin as payment for merchandise.
Almost immediately after the news broke, the price of the meme-based cryptocurrency shot up by 20% to $0.20.
Musk, who was recently named 2021 Person of the Year by Time Magazine, said that Tesla will be accepting dogecoin on a trial basis for now. He tweeted:
“Tesla will make some merch buyable with Doge & see how it goes,”
However, he didn’t elaborate at this stage on what kind of merchandise will be purchasable with dogecoin. Tesla sells everything from mini models of its vehicles through to clothing and even quad bikes for children, with prices ranging from $50 to nearly $2,000.
Musk backs dogecoin over bitcoin
The Tesla cofounder has been an active backer of cryptocurrencies up to this point. In October 2021,
he revealed he’d invested in bitcoin, ether and dogecoin. Musk has also used his sizeable Twitter following of around 66 million to engage in the trading frenzy that has taken place in the crypto space this year. He often tweets about crypto, and has proven to be highly influential in driving up prices within the market.
The co-founder of Bitcoin IRA, Chris Kline, told Reuters.com:
“Elon Musk has been an advocate for the crypto community for many years. His latest announcement will usher in a new era of commerce and trailblaze a path for altcoins to expand their use case,”
However, he hasn’t always been such a vociferous supporter when talking about dogecoin. On an appearance on the Saturday Night Live TV show in May 2021, he described the cryptocurrency rather dismissively as a ‘hustle’.
But Musk seems to have changed his mind, and now believes that dogecoin is better for transactions than bitcoin. He told Time Magazine:
“Fundamentally, bitcoin is not a good substitute for transactional currency,”
“Even though it was created as a silly joke, dogecoin is better suited for transactions.”
″The transaction volume of bitcoin is low, and the cost per transaction is high,”
He also explained that in his opinion, bitcoin is more suitable as a store of value. This is why it’s better for investors to hold onto, rather than to use for transactions.
Musk has also called doge the “people’s crypto” in the past, which according to the Coinbase website, sent the price of the cryptocurrency up a huge 5,859% over the last year. Most recently, Musk ran a Twitter poll, asking users whether or not they wanted Tesla to start accepting dogecoin.
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