• Musk has often called Dogecoin his favorite digital coin earlier in the year
• Tesla CEO said he “doubts that crypto will replace fiat currency”
The meme-inspired cryptocurrency Dogecoin jumped more than 20% on Tuesday morning after Elon Musk said Tesla Inc would accept the digital token as a payment method for some merchandise.
“Tesla will make some merch buyable with Doge & see how it goes,” Musk tweeted.
Dogecoin rose to as high as $0.20 following the tweet before falling back to about $0.19.
Musk, who was named Time Magazine’s person of the year on Monday, has earlier supported Dogecoin development and adoption even as the creators of the meme coin abandoned the project in 2015.
Tesla CEO has often talked about the digital coin, calling it his favorite, and mentioned it in an appearance on “Saturday Night Live.”
Doge ‘to the moon’
Dogecoin was initially started as a joke by Billy Markus and Jackson Palmer in 2013. It takes its branding from the Japanese Shiba Inu dog, which inspired the original “doge” meme.
Tweets from Musk and mounting interest from many retail investors fueled a speculative frenzy in the cryptocurrency, which drove its price higher earlier this year.
Dogecoin skyrocketed from being worth just a fraction of a penny at the start of 2021 to a record-high price of 74 cents in May.
Since then, the price has plunged sharply, dropping over 70% from its all-time high to 20 cents a coin.
Some crypto investors say Dogecoin is similar to “meme stocks” like GameStop and AMC, which shouldn’t be taken seriously.
Musk’s crypto stance
Earlier this year, Tesla, the electric carmaker, started accepting Bitcoin to sell its cars, which was short-lived and soon dropped amid rising concerns that Bitcoin mining uses a considerable amount of non-renewable energy.
Moreover, Musk has now toned down his support for crypto, and in a recent interview with Times, he said he “doubts that crypto will replace fiat currency.”
Picture Credit: CoinQuora