Dogecoin soared 24% after Elon Musk announced Tesla Inc (NASDAQ:TSLA) will accept the cryptocurrency as payment for merchandise. The TIME magazine “person of the year” also revealed the transactions would initially take place as tests.
According to Reuters, CEO Elon Musk took to Twitter and said: “Tesla will make some merch buyable with Doge & see how it goes.” Later, the meme-based cryptocurrency soared by 24% on Tuesday and investors raced up to $0.20.
Coinbase data revealed that ever since Musk has been tweeting about the digital coin, dogecoin’s value has skyrocketed 5,859% in the last 12 months. The Tesla merchandise that could be bought with dogecoin was not specified, but the price range of currently available products is $50 to $1,900.
Tesla sells a varied set of items including mini versions of its famous car models, apparel, and special edition products such as the Cyberwhistle —which resembles the shape of the upcoming Cybertruck, the one that inspired the hugely successful ATV for kids, the Cyberquad.
In the same TIME magazine interview, Musk was short to point out that he endorses dogecoin because it offers quick transactions. He also said, “Bitcoin is not a good substitute for transactional currency.”
A Musk Favorite
However, the mood from analysts is grim when it comes to a broader resurgence of altcoins. While bitcoin maintained its 40% market cap dominance, it failed to reverse its downtrend.
Cointelegraph’s Michaël van de Popp commented: “Starting to have some June/July sensations in the markets where we are only slicing, slowly consolidating towards a bottom structure, while the dough is waiting for a lower level to be touched, which will probably be lost.”
Back in May, Elon Musk created a Twitter survey asking his followers if they wanted Tesla to accept dogecoin. After the post, the price soared to detriment of other similar currencies such as bitcoin or ethereum.
The question came up barely days after he had raved about dogecoin sending the price up after a 700% rally in one month. Always flirtatious with digital assets, Musk also praised dogecoin while hosting a sketch on "Saturday Night Live."
Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.