Tesla CEO Elon Musk announced on Tuesday that Tesla will begin accepting Dogecoin as payment for some of its merchandise, causing the coin to surge by over 20%.
“Tesla will make some merch buyable with Doge & see how it goes,” Musk tweeted to his followers.
Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a “joke,” making fun of the wild speculation in cryptocurrencies at the time.
They wanted to create a peer-to-peer digital currency that could reach a broader demographic than Bitcoin. In addition, they wanted to distance it from the controversial history of other coins. Dogecoin was officially launched on December 6, 2013; within the first 30 days, there were over a million visitors to Dogecoin.com
It quickly developed its own online community, reaching a market capitalization of over $85 billion on May 5, 2021.
Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the “Doge” meme as its logo and namesake.
Dogecoin.com promotes the currency as the “fun and friendly internet currency,” referencing its origins as a “joke.”
Elon Musk boosts popularity of Dogecoin
Elon Musk frequently mentions or talks about Dogecoin on his Twitter account, boosting its popularity significantly in recent years.
Many developers have created new, Shiba Inu-themed coins, hoping to ride the wave of Musk’s promotion of Doge.
Thus developers were prepared for the event of a new pump from Musk, having created the “Shiba Floki” token in the time between his first tweet this summer and the puppy’s actual arrival this Sunday.
Their plan worked: once Musk had published the picture of Floki, in September 2021, Shiba Floki pumped a staggering 1000 percent in value. Other Floki themed coins like “Floki coin,” “Floki Inu” and “Floki Shiba” experienced rises of 250 percent, 60 percent, and 25 percent.
Musk’s first Dogecoin-related tweet occurred on the 20th of December 2020. Musk tweeted “One Word: Doge.” Shortly after, the value of Dogecoin rose by 20 percent.
This was followed by a series of Dogecoin-related tweets by Musk in early February 2021 captioned “Dogecoin is the people’s crypto” and “no highs, no lows, only Doge.” Following these tweets, the value of Dogecoin rose by roughly 40 percent.
The price of the coin rose by more than 100 percent on April 15, 2021 after Musk tweeted an image of Joan Miró’s “Dog Barking at the Moon” painting captioned “Doge Barking at the Moon.”
The price of Dogecoin rose by 11 percent on May 20, 2021, shortly after Musk tweeted a Doge-related meme.
In May 2021, the price of Dogecoin was up 10 percent in the hours after Musk tweeted a Reddit link for users to submit proposals to improve the cryptocurrency.