Tesla accepts payment in Dogecoin, the “dumb” cryptocurrency in the process of collapsing

It is now possible to buy certain Tesla derivatives in Dogecoin, the virtual currency that was created from a joke in 2013.

The Tesla flocked whistle no longer costs 50 dollars on its site, but 300 DOGE. The electric vehicle manufacturer officially accepts payments in Dogecoin for some of its derivative products, as confirmed by its sulphurous boss Elon Musk on Twitter.

On the official American website dedicated to Tesla merch, we also note that the price of the Cyberquad for children is also displayed in Dogecoin.

The Cyberquad payable in dogecoin // Source: Tesla Shop

It had been a few weeks since the billionaire had warned that Tesla would accept payment in Dogecoin for certain derivative products, “ and then we’ll see what happens », he tweeted on December 14. That’s done. And now ?

Dogecoin is a virtual cryptocurrency which, to sum it up without an ounce of exaggeration, is useless. It was launched in 2013 as a joke, based on the Doge meme, with the image of a Shiba Inu.

Like bitcoin, Dogecoin is a currency issued online, from “ peer to peer (when computers can communicate and exchange without going through a central server), on an open-source model. Some consider Dogecoin to be less secure than Bitcoin, as there is much less technical development behind it, and it is based on a less detailed and cumbersome protocol.

Elon Musk is a fan of Dogecoin

In May 2021, the value of Dogecoin had multiplied by 10,000 since 2013. This rise owes a lot to Elon Musk: the price was largely stagnating before April 2021, when the billionaire began to verbalize his passion for virtual currency.

The man is fascinated by cryptocurrencies (Tesla invested $1.5 billion in bitcoin in 2021) and everything related to “internet culture” and memes. Dogecoin combines these two passions.

“It drives people to spend it rather than keep it as a store of value »

Elon Musk on dogecoin

However, Musk also insisted, in a December 13 interview with Time magazine, that he saw a technical advantage in preferring transactions in Dogecoin over bitcoin: “ The transaction volume in bitcoin is low, and the transaction cost is high. It can be, at the very least, a sort of store of value. But fundamentally, bitcoin is not a good substitute for a transactional currency. »

The Dogecoin, according to him, “ even though it was created as a blagdumb ue” would encourage people to use it, even though it is a very volatile asset: ” it’s actually a good thing, because it makes people spend it rather than keep it as a store of value “, he assured.

Dogecoin lost 80% of its value in 8 months

Yet the volatility of Dogecoin is a real question: if its course can vary enormously, this can lead to enormous changes in the cost of products. A whistle showing 300 DOGE is worth $58 today, but if the price were to go back to its May 2021 level, 300 DOGE would be worth nearly $200.

On May 8, Elon Musk participated in the comedy show Saturday Night Liveduring which he assured (in a skit) that Dogecoin was “ a scam “. In 45 minutes, the Dogecoin is changed from 70 cents to 48 cents. It then went up, then down again… its curve was never the same again.

Since then, the crypto-asset has experienced a slow decline that nothing seems to stop: it has lost 80% of its value since its big peak in May 2021. However, given how much the value of virtual currency can vary at the rate of announcements of certain personalities (businessman Mark Cuban is also a fan of dogecoin), it would be wrong to announce it dead and buried.

Elon Musk’s tweet will give a boost of visibility and confidence in the “dumb” cryptocurrency. The logic is this: Tesla now stands to lose from the fall in value of Dogecoin, because if it drops too much, the value of its derivatives (like the expensive Cyberquard) would also fall, and customers could get hold of it. goods at lower prices. This decision therefore generates confidence among crypto enthusiasts, who will therefore buy Dogecoin again, which will increase its value.

It remains to be seen how far this recovery will go. Because if we indeed see, after the announcements of Tesla, the price of Dogecoin go up, it is enough to take a step back to observe that this increase is minimal compared to the overall trend for the year 2021.

tesla doge course 2021
The price of Dogecoin, in euros, over one year // Source: coinmarketcap

Leave a Comment