Elon Musk announces that Tesla will accept Dogecoin, but it has a catch

Elon Musk announces that Tesla will accept Dogecoin, but it has a catch

Elon Musk, the CEO of Tesla, indicated via Twitter that the electric car company would accept Dogecoin as a means of payment, although not to buy their vehicles. As expected, the price of the 'meme coin' skyrocketed.

After a few months of calm, Elon Musk has unleashed the Dogecoin frenzy once again. The entrepreneur, recently named TIME magazine's Person of the Year, announced that Tesla would accept meme coins as a means of payment; however, don't get too excited because you won't be able to use DOGE to reserve a new electric car. Instead, according to the company's CEO, Dogecoin can be used to pay for the purchase of promotional products or merchandise. The announcement was made via Twitter, logically. However, there are still not too many details regarding the operation or to which catalog of items the possibility of using cryptocurrencies will be applied.

"Tesla will allow buying some products with DOGE, and we'll see how it goes," Elon Musk posted. As expected, the entrepreneur's statement immediately affected the Dogecoin price. At the time of writing, its price reached as high as $0.2134, which represented a 28.9% increase in a matter of hours. The cost of Dogecoin may continue to rise. Still, knowing the volatility of the market and the large number of transactions that occur when events like this occur, it would not be uncommon for it to reverse the trend at some point during the day. What is clear is that, once again, Elon Musk has demonstrated his ability to influence the market with just a handful of characters.

Elon Musk, Tesla, and Dogecoin, a "partnership" that is once again flourishing

Recall that Tesla already had a brief experience with the use of cryptocurrencies. In the first part of 2021, the company announced that it would accept Bitcoin as a means of payment to buy its electric cars. However, that move was reversed shortly after that in the face of criticism over the environmental impact and energy consumption of mining the asset above. Also, at the beginning of this year, Elon Musk launched a series of tweets that boosted the Dogecoin price. While meme coin had been on the market for several years at the time, it had never experienced such a level of exposure. "DOGE is the people's cryptocurrency," said the entrepreneur among so many posts related to the topic on his Twitter profile. And the trend continued for several months.

Back in May, the entrepreneur hosted Saturday Night Live, and there was a lot of anticipation that his comments about Dogecoin would significantly boost its price. And while some of that happened, it also had the opposite effect. The volume of transactions with this cryptocurrency was so high that it caused delays in exchanges like Robinhood and collapsed its price. Elon Musk's participation in the Weekend Update segment, where he played an economic columnist, also had a lot to do with this; when asked the question "What is Dogecoin?" he answered: It's a hustle. As a result, the cryptocurrency lost a third of its value, although it later recovered slightly.

Beyond the humor and its consequences on the market, the furor over Dogecoin continued for a few more days. After his participation on SNL, the CEO of Tesla and SpaceX announced that in 2022 the aerospace company will launch the Doge-1 satellite, which was funded entirely with DOGE; and he also conducted a poll on Twitter in which he asked whether Tesla should accept Dogecoin as a means of payment. Again, the response was overwhelming, with 78.2% of the nearly 4 million participants answering yes.

As time went by, it seemed as if the fire had died down. However, the romance between Elon Musk, Tesla, and Dogecoin appears to have blossomed with the executive's most recent announcement.

An announcement that still leaves a few questions

As we mentioned earlier, Elon Musk has not given details on what kind of Tesla items will be available for purchase with Dogecoin. His announcement has not gone unnoticed, and that's for sure. Beyond the impact on the cryptocurrency price, his tweet already has more than 28 thousand retweets and 155 thousand "Likes." Tesla has an online store with a varied line of promotional products. From clothing and gift cards to miniatures of their electric cars and the eye-catching. CyberwhistleTesla's new whistle, a stainless steel whistle that quickly sold out despite its $50 price tag. At the moment, there is no reference to Dogecoin in the online shop, but we could find news soon.

A crypto meme

It's worth remembering that Dogecoin started the year at around $0.004 but soared more than 15,000% to over $0.70 in May. Although cryptocurrencies are gaining acceptance as a currency to buy goods, Dogecoin doesn't have much use in the real world. However, it has some niche markets as a currency for tipping artists online.

The story of Dogecoin comenzó en 2013, as a joke on the rise of cryptocurrencies, based on one of the most popular memes on the internet, that of the Japanese dog Doge. The idea came from Billy Markus, an American programmer who worked as an engineer at IBM, and Jackson Palmer, an Australian who was head of the marketing department at Adobe Systems. Inspired byLitecoin -based on a cryptographic protocol not managed by any central authority, but by consensus among peers-, the development of Dogecoin is part of a decentralized network in which transactions can be made between individuals and companies in a loosely regulated way. Therefore, there is no difference between this cryptocurrency and many other similar ones that can be easily found.

This is not the first time Musk has moved the price of a crypto asset. He did it earlier this year with bitcoin when he assured that he would accept its use to purchase his electric cars. A comment that had a great repercussion in the market but soon after was denied by Musk, justifying himself in the high energetic consumption of miners. Opinion changed again in June to ensure that Tesla would accept it as a method of payment when "a reasonable use of clean energy by miners with a positive future trend is confirmed."