The cryptocurrency Dogecoin saw a massive 20 percent increase in its worth on 14 December 2021 after Tesla CEO Elon Musk said it would be accepted as currency for some merchandise on a test basis.
At the time of report, one unit of Dogecoin was trading at $0.19. The price was up about $0.032 or 20.45 percent compared to the previous day. Crypto analysts were quick to link the Dogecoin price jump to Musk's tweet, which said: "Tesla will make some merchandise buyable with Doge and see how it goes".
Musk's tweet proposed that the electric car maker would accept Dogecoin as payment for stock on a test basis. He sees Dogecoin as the best cryptocurrency to transact with and thinks that Dogecoin is probably going to gain prominence in cryptocurrencies and may move higher in the next few months.
Strikingly, Musk is known for influencing the value of Dogecoin through his comments on social media. His tweets on the cryptocurrency in the past have helped the Dogecoin take off over the year.
Musk didn't determine which merchandise, could be purchased with Dogecoin. Tesla sells apparel 'Giga Texas' belt buckles and mini models of its vehicles, as well as quirky limited-edition items like the 'Cyber Whistle,' which is designed according to its much-anticipated Cybertruck. It recently launched 'Cyberquad', a quad bike for kids that is modeled after a truck. Musk, who has more than 66 million Twitter followers, has helped fuel the cryptocurrency prices especially during this pandemic.
The electric car maker bought $1.5 billion worth of bitcoin in January and then announced in March that it would begin accepting the currency for car purchases. However, in May, Musk backed the idea as he marked bitcoin's energy consumption "crazy" and Tesla said it would no longer accept purchases using the currency.
Bitcoin and other cryptocurrencies are 'mined' using intense computing power which leaves a huge carbon footprint. Musk has since spoken more about Dogecoin and said he was working with engineers to work on its productivity. The Tesla boss claims Dogecoin is better for the transaction, in a recent interview with Time magazine, which named him 'Person of the Year' for 2021 on Monday.
Musk has been exceptionally occupied with the current year's retail trading frenzy, tweeting about cryptocurrencies and helping push their prices.
Speaking to Time on Monday, Musk said: 'I'm not a huge hater of fiat (traditional) currency like numerous in the crypto world are. But there are benefits with crypto comparative with fiat, in that fiat currency tends to get diluted by whatever government it is. This becomes a harmful tax on those, particularly the people who have cash savings with the money supply,' he said.
Regardless, financial experts view cryptocurrency as an unpredictable, risky and speculative investment. Thus, it's recommended that you only invest what you can bear to lose.
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