Dogecoin skyrocketed more than 20% on Tuesday after Elon Musk said Tesla would accept it as payment for some merchandise.
The meme-inspired cryptocurrency skyrocketed as much as 23% on Tuesday. After Elon Musk said Tesla would accept Dogecoin as payment for some of its merchandise. It last traded 18.9% higher. “Tesla will make some merch buyable with Doge & see how it goes,” the electric auto maker’s CEO said in a tweet.
The Tesla CEO has been a long-running supporter of Dogecoin. Which is a Japanese Shiba Inu dog-themed cryptocurrency that was started as a joke in 2013. In May, he asked his Twitter followers whether Tesla should start accepting DOGE, to which the overwhelming response was “yes.” Earlier the same month, Musk said he thought Dogecoin could ironically become the future of cryptocurrencies.
In doing so, Tesla adopts the unusual position of accepting only Dogecoin out of all possible cryptocurrency options. Musk risks irking Bitcoin proponents, in particular, having previously allowed then disqualified BTC purchases for Tesla vehicles over alleged environmental concerns. Musk, who has over 66 million followers on Twitter, has been highly engaged in this year’s retail trading frenzy, tweeting about cryptocurrencies and helping send their prices soaring.
Musk, who was named TIME Magazine’s 2021 Person of the Year, told TIME on Monday that Dogecoin is better suited for transactions than Bitcoin. “The transaction volume of [Bitcoin] is low and the cost per transaction is high,” Musk said. “Fundamentally, Bitcoin is not a good substitute for transactional currency.” “The total transaction flow you can do with Dogecoin, like transactions per day, has a much higher potential than Bitcoin,” according to Musk. Some Bitcoin supporters pushed back, citing the Lightning Network, which aims to enable faster transactions on the Bitcoin blockchain.
