Dogecoin Surges 18% After Elon Musk Says the Crypto Will Be Accepted at Tesla

Dogecoin Surges 18% After Elon Musk Says the Crypto Will Be Accepted at Tesla
Elon Musk and son X Æ A-12 on stage TIME Person of the Year on December 13, 2021 in New York City. (Photo: Theo Wargo, Getty Images)

Tesla will soon accept dogecoin as payment for merchandise, according to a tweet from Elon Musk early Tuesday. The announcement caused dogecoin’s price to surge over 18% at a time when most cryptocurrencies have been plunging.

“Tesla will make some merch buyable with Doge & see how it goes,” Musk, who was revealed as Time’s Person of the Year for 2021 on Monday, tweeted at 5:34 a.m. ET.

Dogecoin’s price skyrocketed immediately, and it’s currently up over 18% to a price of $US0.19 (A$0.27). That’s well below the crypto’s all-time high of $US0.71 (A$1) back in May, but up significantly from recent days.

Dogecoin was originallly founded as a joke cryptocurrency to poke fun at the silliness of the crypto market, but has since taken off as a popular alternative to more mainstream coins like bitcoin and ethereum. Musk, the wealthiest person on the planet, often tweets about cryptocurrency and can send prices up and down on a whim, much like he did today with dogecoin.

“Fundamentally, bitcoin is not a good substitute for transactional currency,” Musk told Time magazine on Monday. “Even though it was created as a silly joke, dogecoin is better suited for transactions.”

Tesla has experimented with accepting bitcoin payments for cars, but stopped when the price of bitcoin went down. Notably, Musk isn’t letting people buy cars with dogecoin. At least not yet. But he seems particularly bullish on dogecoin as a method of payment — a sentiment that could completely change by next week, if history is any guide.

Bitcoin, the most popular cryptocurrency in the world, is trading at $US47,286 (A$66,562) Tuesday morning, down almost 3% from the day before. Bitcoin hit an all-time high of $US68,007 (A$95,729) on November 9, but has been steadily declining since its peak.

Ethereum is also down almost 5% to a price of $US3,810 (A$5,363), tracking right along with bitcoin and virtually every other major cryptocurrency on the market. Ether also hit an all-time high on November 9 at $US4,806 (A$6,765).

Musk, who’s worth $US297 (A$418) billion, paid $0 in federal income tax in 2018.