Even Tesla and SpaceX founder Elon Musk couldn’t save Dogecoin (DOGE) and other cryptocurrencies from the latest downturn despite touting the popular meme coin.
Musk, who has said in the past that he personally owns DOGE along with Bitcoin and Ethereum, has been known to cause upward spikes in cryptocurrencies. Whether it’s a tweet or a topic of discussion, Musk talking about cryptocurrencies is typically a good thing.
This time around, DOGE jumped as high as 20%, while the rest of the crypto space has been floundering as 2021 comes to a close. Nonetheless, it’s still been a bullish year overall for digital assets as the space has seen exponential growth this year, with institutional interest helping to stoke demand.
Meanwhile, DOGE has been countering the trend with a bit of Musk’s magic. He recently mentioned in a tweet that Tesla merchandise would be purchasable with DOGE.
“Tesla will make some merch buyable with Doge & see how it goes,” the Tesla CEO said.
Tesla will make some merch buyable with Doge & see how it goes
— Elon Musk (@elonmusk) December 14, 2021
Bitcoin and Ethereum both reached all-time highs this year, with the former being helped by introducing a Bitcoin-based exchange-traded fund (ETF). However, heading into the home stretch of 2021, cryptocurrencies have faltered since the Covid-19 Omicron variant arrived after Thanksgiving.
DOGE Better For Purchases?
Musk’s tweet comes as he recently also said that the popular meme coin would be a better alternative for purchases. Time Magazine’s 2021 Person of the Year noted that its use case is more suitable as a transactional currency when compared to Bitcoin due to cost.
“Fundamentally, bitcoin is not a good substitute for transactional currency,” Musk told Time Magazine. “Even though it was created as a silly joke, dogecoin is better suited for transactions.”
″[T]he transaction volume of bitcoin is low, and the cost per transaction is high,” he said.
90% of Bitcoin has already been mined as investors look to keep it as a store of value—hence, the digital asset earning its status as “digital gold.” With currently over 130 billion in circulating supply, Musk sees this as a plus for DOGE, noting that it “encourages people to spend, rather than sort of hoard as a store of value.”
“There are advantages with crypto relative to fiat, in that fiat currency tends to get diluted by whatever government it is,” Musk said. “It ends up being a pernicious tax on people, especially those who have cash savings with a dilution of the money supply.”
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