The value of the internet meme-inspired cryptocurrency ‘dogecoin’ increased by up to 23% on Tuesday after Elon Musk announced that Tesla would accept it as payment for some of its merchandise.
“Tesla will make some merch buyable with Doge & see how it goes,” the electric auto maker’s CEO said in a tweet.
Musk has consistently promoted Dogecoin, referring to it as his favourite digital currency and discussing it on various occasions.
Dogecoin was established as a joke in 2013 by Billy Markus and Jackson Palmer. Its logo is based on the Japanese Shiba Inu dog, which inspired the original “doge” meme. Musk’s remarks and a rise in investor interest sparked a cryptocurrency fever early this year, driving up its price.
Dogecoin’s value increased from less than a penny at the beginning of the year to 74 cents in May. However, it has now dropped substantially, with the token now trading at only 20 cents per coin, down more than 70% from its all-time high.
Some cryptocurrency investors say that Dogecoin is a fad, similar to “meme stocks” like GameStop and AMC and that it should not be treated seriously.
“I’m actually not convinced … that dogecoin is good for the crypto market,” Brad Garlinghouse, CEO of crypto firm Ripple, said in an interview.
Shiba Inu, a so-called meme token that promotes itself as a “dogecoin killer,” has just emerged as a competitor to Dogecoin. Shiba Inu is now the 13th-largest coin, momentarily surpassing Dogecoin.