Dogecoin: Elon Musk asks Twitter followers if Tesla should start accepting shiba inu-themed cryptocurrency

What's going on with Dogecoin?

Elon Musk has asked his Twitter followers whether Tesla should start accepting Dogecoin in payment for its vehicles.

The proposal immediately gained overwhelming support from his followers: within 10 minutes of posting a poll, some 400,000 people had voted. Almost 80 per cent of respondents had said yes.

Any corporate support from Tesla would likely help further accelerate the growth of the cryptocurrency, which was originally created as something of a joke, themed around an internet-famous shiba inu.

But Tesla would also have to contend with the wild fluctuations in the value of the digital currency. It has gained almost 10,000 per cent in 2021, but has at the same time often seen sharp drops in its price.

The proposal comes just a day after Mr Musk said his other company, SpaceX, would be launching a satellite called “Doge-1” to the Moon next year. The mission would be fully paid for in the cryptocurrency, allowing it to become both the “first crypto” and “first meme” in space, he noted.

Tesla has already begun accepting bitcoin as payment, and bought a huge tranche of the cryptocurrency earlier this year. At times, it has been making considerably more profit from gains in bitcoin’s value than it has from its core business of selling vehicles.

Experts noted that the backing of Tesla helped give significant legitimacy to bitcoin, and that it likely helped drive some of its recent growth. In the few minutes after Tesla made its announcement in February that it would support bitcoin, the price rose 14 per cent and took it to what was then an all-time high.

Mr Musk’s show of support for Dogecoin comes after a relatively weak few days for the price of the cryptocurrency. After hitting an all-time high on Saturday, it has gradually dropped in price, and is down 0.6 per cent over the last 24 hours.

Much of the mechanics behind that rise and fall seemed to be the result of Mr Musk’s widely trailed appearance on Saturday Night Live. In advance of the show, the price had gradually risen – but then dropped over the course of the actual broadcast, seemingly because Mr Musk only gave light and muted mention of it.

But Mr Musk’s tweet about Tesla’s possible support for the currency helped it win back some of that value. The price jumped about 17 per cent in the minutes after his post.

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