Tesla’s CEO, Elon Musk announced on Tuesday that the company would begin to accept Dogecoin as payment for merchandise. This is a test by the electric car brand, and has already spiked the value of the memecoin by 20%.
Dogecoin is popular among retail investors, and is now valued at $0.20. Elon Musk revealed the decision in a tweet. But despite saying that Dogecoin would be a payment method for merch, he didn’t reveal the specifics of the products in question.
Tesla sells a wide variety of products as merchandise. The prices vary from $50 to $1900, and consist of apparel, and mini versions of its cars. All these products can be bought in exchange for Dogecoin, on a temporary basis.
Musk’s History With Cryptocurrency
The 50-year-old has been a longtime supporter of cryptocurrency, and memecoins in particular. His tweets have helped the value of the online tokens soar over time, even if just for a short while.
In May, the Tesla CEO asked his followers on Twitter whether the company should start accepting Dogecoin as payment. The people answered with a resounding ‘yes’ to the idea. Earlier in May, Musk also tweeted about his belief that dogecoin would end up being the future of cryptocurrencies.
In January 2021, Musk announced that Tesla would be accepting payment in Bitcoin for their cars. But, that offer was retracted in May, as he criticised Bitcoin’s ‘insane’ energy use. Although Dogecoin is among the cryptocurrencies that require a large amount of computing power, Musk is working with developers to try and make it more efficient.
This week, Musk has sold $900 million worth of Tesla stock. His total sales since the start of November amount to just under $13 billion. On Monday, he was named as Time Magazine’s 2021 Person of the Year, calling him a “clown, genius, edgelord, visionary, industrialist, showman, [and] cad.”
Elon Musk was one of the founders of PayPal, and is no stranger to fintech. He believes that Dogecoin is a much better payment method than Bitcoin due to its higher speed per transaction.
What Is Dogecoin?
Dogecoin has been around since 2013, and was originally created as a joke. One of the main features of the memecoin is that it is in unlimited supply. At the time of writing, it’s market cap is at $24 billion. Around 10,000 units are created every minute by miners.
Although the individual value of a DOGE unit is very little, the power of the memecoin is in the number of units in supply. In total, there are 130 billion DOGE in circulation at the time of writing.
Elon Musk’s tweets and publicity about the memecoin helped increase its value exponentially. In the last one year, it’s value has grown by over 5,000% and is among the most valuable memecoins on the market. But, it remains a very volatile asset. And in the case of investments, there is no certainty as to whether its value will rise or fall.