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Dogecoin surges after Tesla says it will accept cryptocurrency as payment for some merchandise

On Tuesday, Tesla CEO Elon Musk said the company would accept dogecoin as payment for some of its goods. The meme-inspired cryptocurrency then skyrocketed as much as 23 percent following those comments, and it last traded 18.9 percent higher.

“Tesla will make some merch buyable with Doge & see how it goes,” said Musk in a tweet, saying nothing else about what kind of merchandise would be available through the coin, or how transactions would occur.

Musk has frequently shown himself to be a fan of dogecoin, calling it his favorite cryptocurrency and even mentioning it during his appearance on NBC’s “Saturday Night Live.” After his announcement, the cryptocurrency rose a substantial amount, up to $0.22, before falling back to about $0.19.

At first, Dogecoin was created as a joke by Billy Markus and Jackson Palmer in 2013. The branding originated from the Japanese shiba inu dog, which gave rise to the original “doge” meme.

The cryptocurrency started at just a fraction of a penny at the beginning of the year, hitting a record price above 74 cents in May. Since then, it has dropped sharply, down more than 70 percent from the highest price. 

Musk was named TIME Magazine’s 2021 Person of the Year, and he told TIME on Monday that bitcoin is not as fit for transactions as dogecoin. “The transaction volume of [bitcoin] is low and the cost per transaction is high,” he said. “Fundamentally, bitcoin is not a good substitute for transactional currency.” Musk added, “The total transaction flow you can do with dogecoin, like transactions per day, has a much higher potential than bitcoin.” 

ARTICLE: ELIZABETH HERTZBERG

MANAGING EDITOR: CARSON CHOATE

PHOTO CREDITS: FORBES

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