Moments after Tesla and SpaceX CEO, Elon Musk tweeted that Dogecoin can be used to purchase Tesla’s merchandise, the digital currency’s value surged by 20 percent.
Musk, in a tweet, stated that the Electric Vehicle (EV) company Tesla from today, will accept the popular token as payment for some of its merchandise, such as belt buckles, chargers, and other merchandise.
Tesla’s online store displayed the prices for some of the merch in US dollars and Doge. The items include a whistle inspired by its highly anticipated Cybertruck model (300 DOGE), an electric quad bike for children ($12,020) and a belt buckle ($835).
After making the announcement, the token, which began originally as a joke from a meme, rose in value by 20 percent. CoinDesk data puts it that Dogecoin topped $0.20 a coin.
This isn’t the first time Elon Musk’s tweets have incredibly influenced the fall and rise of popular assets within the financial markets, especially cryptocurrencies. Last year, Dogecoin went from being just an ordinary altcoin originating from the Shibu dog meme to one of the world’s most valuable cryptocurrencies after Musk had tweeted that he was investing in the asset. In May 2021, after Musk’s statement, the token’s price peaked at nearly 70 cents. Its market capitalization also grew to a peak of approximately $90 billion.
According to CoinGecko, Dogecoin is currently the 11th most valuable token and has a market capitalization of over $26 billion.
It should be recalled that the EV maker in 2021 briefly accepted bitcoin, the world’s most valuable cryptocurrency by market cap, as payment for its electric vehicles. However, after citing concerns over Bitcoin’s high energy usage, Tesla noted that it would no longer accept the token as payment.
The Bitcoin network, through a process called mining, uses large amounts of energy. The announcement also impacted Bitcoin, plummeting its value.
As Dogecoin uses significantly less energy, Musk in December, last year mentioned that he would work with dogecoin developers to improve the efficiency of transactions. He had also revealed that plans to accept Dogecoin as payment had been in the works for a while.
The SpaceX Founder in December had tweeted that “Tesla will make some merch buyable with Doge & see how it goes.” The announcement also surged the price of the token by 20 percent last month.