A day after being named Time’s 2021 Person of the Year, Tesla CEO Elon Musk tweeted that the electric car company will make merchandise buyable with Dogecoin “and see how it goes.” The cryptocurrency rose 31% immediately after the tweet but then fell again.
Fast facts
- Within two hours of Musk’s 5:34 a.m. ET tweet, the price of Dogecoin rose from US$0.16 to US$0.21 with volume increasing 250% from US$995 million to US$3.5 billion, according to CoinGecko. But a day later, Dogecoin had lost most of those gains and is now trading at US$0.18.
- Elon Musk has a long history of supporting Dogecoin by tweet, and even getting chastised by others in the crypto community for cheerleading a meme coin — initially produced as a satire — over established coins like Bitcoin.
- Earlier this year, Musk announced Tesla would accept Bitcoin for payment and then retracted his statement when it was criticized as hypocritical since Tesla reduces gas consumption, aiding the fight against climate change, while Bitcoin requires tremendous energy to mine.
- This positive price action bumped the world’s leading memecoin back into the crypto top 10 — overtaking algorithmic stablecoin project Terra’s LUNA token in the process, which itself had been on a price tear recently. Despite this, Dogecoin’s price still remains in the dog house, trading 75% below its all-time high of US$0.75 in May this year.