The price of Dogecoin pumps amidst the crypto bear market following a tweet from Elon Musk that his space exploration company SpaceX will soon start accepting Dogecoin for merch.
Elon Musk’s space research business, SpaceX, and Musk’s other company, Tesla, will soon accept Dogecoin as payment for items.
“Tesla merch can be purchased with Doge, and SpaceX merch will be available soon,” the multi-billionaire tweeted on Friday. “Maybe one day,” he said when asked if subscriptions for Starlink, a satellite-based broadband internet provider, could be paid in DOGE.
The price of Dogecoin immediately jumped after the announcement, as expected. According to CoinGecko, the meme coin was trading at $0.078 at 11:24 a.m. ET (three minutes before the tweet).
It had risen to $0.084 at 11:50 a.m., an increase of about 8%. The pump, on the other hand, was just temporary. Dogecoin’s price has dropped to roughly $0.080. DOGE is still up slightly over 1% for the day, despite the fact that the rest of the crypto market is down significantly.
Since early last year, the Tesla CEO has had a significant influence on Dogecoin’s price. After announcing his company’s $1.5 billion Bitcoin purchase in February 2021, he followed up with a series of enthusiastic tweets about Dogecoin, coinciding with the cryptocurrency’s eventual but brief climb to the top three by market cap.
Despite the fact that the coin has failed to return to its previous highs, Musk’s tweets continue to have an impact. When Musk revealed in December that Tesla would soon take DOGE for apparel, the token jumped another 20%, which he repeated today.
The so-called Dogecoin killer Shiba Inu collapsed months ago when Musk stated that he didn’t hold any of the counterfeit tokens.
The CEO’s fondness for DOGE could be more than a passing fad. Musk claimed in a January interview with TIME that Dogecoin was superior to Bitcoin as a means of trade because of its higher transaction throughput.
Last May, he tweeted, “Ideally, Doge speeds up block time 10X, increases block size 10X, and decreases fee 100X,” implying that it will defeat Bitcoin “hands down.” To put it another way, Musk is lobbying for greater storage space on the blockchain so that more Dogecoin transactions can be handled at once.
Rather than expanding block size, Bitcoin developers have chosen to enable scalability with layer-2 technologies such as the Lightning Network, which allows for off-chain processing of cheap and almost immediate Bitcoin transactions.
According to Musk, if such a solution is correctly developed, Bitcoin will be able to “grow to execute a large number of transactions.”
Tesla used to accept Bitcoin as a form of payment for its vehicles, but it stopped doing so owing to worries about Bitcoin’s environmental impact.