Dogecoin spikes 30% after Elon Musk says he might take it as payment for Tesla

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Dogecoin spikes 30% after Elon Musk says he might take it as payment for Tesla
Dogecoin is a 'meme' cryptocurrency, seemingly created as a jokeYuriko Nakao/Getty
  • The meme cryptocurrency dogecoin has gained 30% over the past 24 hours.
  • It jumped after Elon Musk said he was looking into dogecoin as a payment option for Tesla.
  • Tesla on Wednesday suspended the option to pay for cars with bitcoin over environmental concerns.

Dogecoin spiked 30% after Elon Musk said on Thursday that he might accept it as a payment method for Tesla. That followed his announcement on Wednesday that he'd stop allowing bitcoin payments for Tesla products over environmental concerns.

Dogecoin had risen by 30.2%, to $0.54, as of 8:20 a.m. on Friday in New York, according to CoinBase. It initially jumped on Thursday evening after Musk tweeted about considering the cryptocurrency as a payment method for Tesla.

"Working with Doge devs to improve system transaction efficiency," he said. "Potentially promising."

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Dogecoin is the fourth-largest cryptocurrency by market capitalization. After Musk's tweet, the value of the dogecoin market rose by over $10 billion, to about $67 billion, as trading volume accelerated.

The token, which started as a joke in 2013 and is often described as a "meme coin," has rallied since early April, reaching a record high of $0.731578 on May 8. It has made year-on-year gains of 20,987.6%.

After Musk said Tesla would no longer accept bitcoin, the world's largest cryptocurrency, the coin fell by as much as 15% and dragged crypto stocks down with it.

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Musk said he'd look into more environmentally friendly cryptocurrencies to use instead of bitcoin. He said that while he believed in crypto, he was concerned about fossil fuels used in mining.

On top of dogecoin, Musk could explore cryptocurrencies including ether, Cardano's ADA, XRP, and chia, all of which have a smaller environmental footprint than bitcoin.

Researchers and the crypto community are divided on bitcoin's environmental impact. Cathie Wood's Ark Invest published research on Thursday arguing that bitcoin mining actually helped the environment, whereas Bank of America said earlier this year that bitcoin used more energy in a year than American Airlines.

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Tesla shares were up by 1.98% in premarket trading on Friday.

Read more: 'Nothing is more supremely irritating than watching your neighbors get rich': Legendary investor Jeremy Grantham breaks down the psychology of investing in bubbly assets like Dogecoin - and shares where long-term investors can find cheap assets

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