Stock prices often soar or sink based on expectations of future earnings. For cryptocurrencies, the rise or fall of markets may depend more on the mood of billionaire entrepreneur Elon Musk.
Prices for Dogecoin skyrocketed about 30% Tuesday to top 20 cents after Musk announced car maker Tesla would accept the cryptocurrency as payment for some merchandise sold by his electric vehicle company. He is CEO of Tesla.
Writing on Twitter, Musk said he would make “some merch buyable with Doge and see how it goes.” He wasn’t more specific. A company spokesperson didn’t immediately respond to a request for comment for this story.
By mid-afternoon, Dogecoin had given back some of its gains, and ultimately closed at just over 18 cents.
To be sure, Musk is part of a growing fan club for cryptos. A survey released in April by Mastercard found that 93% of respondents said they would consider using an alternative means of payment, including cryptocurrency.
“Consumers are also increasingly showing interest in being able to spend crypto assets for everyday purchases,” Mastercard said. “As global interest in cryptocurrencies as a payment method continues to accelerate, 4 in 10 people (40%) across North America, Latin America and the Caribbean, the Middle East and Africa, and Asia Pacific say they plan to use cryptocurrency in the next year.”
This week's Dogecoin spike isn’t the first time that Musk’s Tweets sent the cryptocurrency market into a tizzy.
Musk’s feelings about Bitcoin, the most widely traded crypto, have also vacillated.
Tesla announced in February that it would purchase $1.5 billion in bitcoin and accept cryptocurrency as a form of payment. But in May, he stunned the cryptocurrency world when he announced that Tesla would no longer accept bitcoin as payment to purchase the company’s vehicles.
At the time, Musk said he was concerned about the environmental impact from so-called bitcoin miners.
Fast forward to July and Musk appeared poised to change his mind about Bitcoin yet again. Speaking at a conference, Musk said Telsa would begin accepting bitcoin for vehicle purchases “once it conducts due diligence on the amount of renewable energy used to mine the currency,” according to Reuters.