Elon Musk's Tesla Enables Dogecoin (DOGE) Payment, Price Surges Over 20%
On April 2, 2019, Tesla CEO Elon Musk posted on X (formerly called "Twitter"), noting that "Dogecoin might be my fav cryptocurrency. It's pretty cool." Unbeknown to Musk, the Tweet started a memecoin movement that brought in tens of billions of dollars and made a handful of billionaires out of thin air. Over five years later, Musk's support for DOGE has continued, with Tesla recently enabling DOGE payments on merchandise.
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Musk recently visited the Berlin gigafactory, where he was asked about the possibility of allowing DOGE payments for a Tesla car. "At some point, I think we should enable that," Musk replied, which was cheered by the crowd.
Then, on May 4, Tesla quietly updated the website that it has begun to accept DOGE as payment on some products. While you cannot buy a car with DOGE, you can buy several pieces of merchandise with DOGE.
The process works by giving you a short time frame to send a specific amount of DOGE to the Tesla wallet, which includes applicable taxes and fees. If you do not submit the transaction in time, it will reset and generate a new amount of DOGE in line with the updated price of the token. All purchases with DOGE are final and cannot be canceled or returned.
While Tesla did not specifically announce the move, fans of the company and DOGE were quick to notice the change. News outlets began to cover the story, and the price of DOGE surged. The token went from less than $0.13 on May 2 to nearly $0.17 on May 6th. In total, the move marked a price increase of over 20%. In the same time frame, DOGE gained more than $7 billion in market cap.
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However, this is not the first time that Tesla has allowed cryptocurrency payments. In 2021, Tesla purchased $1.5 billion worth of Bitcoin and began allowing customers to use Bitcoin as a method of payment. However, just a few months later, Tesla stopped allowing Bitcoin as a form of payment. Musk posted an announcement on Twitter, stating that "Tesla has suspended vehicle purchases using Bitcoin. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel."
This is relevant because DOGE is a hard fork of Bitcoin; this means that it uses the same mining methods to verify transactions as Bitcoin. While DOGE operates on a much smaller scale and generates less emissions than Bitcoin, it is still a relevant concern for the company. However, Musk is likely aware of this and factored it into his decision to begin offering DOGE as a form of payment.
Tesla integrating DOGE could show that cryptocurrency has a place as a form of currency and a store of value in the future. Tesla has continually been at the forefront of innovation, and this could signal what the future of cryptocurrency looks like.
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