Elon Musk said Tuesday that Tesla will start accepting Dogecoin as payment for some of its goods.
“Tesla will make merchandise buyable with Doge and see how it goes,” tweeted the electric car maker’s CEO, sending the meme token up more than 23%.
GWYNETH PALTROW INVESTS IN BITCOIN MINER TERAWULF
Musk, recently named Person of the Year 2021 by the Times, told the outlet that the world’s largest cryptocurrency, Bitcoin, is fundamentally “not a good substitute for transactional currencies.”
“Bitcoin’s transaction volume is low and the cost per transaction is high,” he said, adding that it is better suited as a “store of value”.
Though created as a joke, Musk argues that Dogecoin is “better for transactions,” has “much higher potential” when it comes to the volume of transactions per day, and ultimately, “encourages people to spend money rather than how a kind of hoarding store of value. “
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Although Tesla reversed its course in May on the possible use of Bitcoin as an alternative form of payment for its cars, the company still has Bitcoin on its balance sheet after a $ 1.5 billion purchase earlier this year. Still, Musk and others have criticized the digital currency for its environmental impact and massive energy consumption.
After the announcement, Tesla shares fell more than 2% in pre-market trading.