Elon Musk tweet sends Dogecoin soaring 38%. Will the rally last?
Will the Tesla founder’s support for the cryptocurrency be enough to keep it afloat long term?
Elon Musk, whose words seem to often move markets, announced in a Tweet early this morning that Tesla will start accepting Dogecoin for some of its merchandise. The coin spiked almost 25% within minutes and was up 38% about an hour later.
It’s a vote of confidence from Time’s person of the year and one of the world’s biggest companies. Back in October, Musk explained that he decided to support Doge because a lot of his employees at Tesla and SpaceX own it.
“It felt like the people’s crypto,” he said in a Tweet.
Dogecoin, though, like most cryptocurrencies, is volatile. After skyrocketing more than 9,800% earlier this year, Doge has been trading lower. As of December 14, it’s down about 75% from its previous high.
Before Musk’s recent tweet, some crypto sites were forecasting rough times for the coin. One said that Doge was likely to fall below 10 cents as it entered a bear market. The coin is trading at 19 cents at this writing.
Musk, though, moves markets. Shares of Etsy opened 8% higher the day he exclaimed his love for the online marketplace. Though Gamestop was already on the rise, the meme stock opened almost 140% higher after he tweeted “Gamestonk!!”
He’s big on Doge, which could keep it strong for quite a while.
In a video shared to Twitter by Time, Musk explained why Dogecoin has a higher transaction value than Bitcoin.
“Even though it was created as a silly joke, Dogecoin is better suited for transactions,” he said. According to Musk, Doge’s total transactions per day has a much higher potential than Bitcoin.