Cryptocurrency markets have been extremely volatile because of Tesla Inc. chief Elon Musk’s tweets for months now. The billionaire is very active on the microblogging site Twitter and nowadays, his favourite subject is cryptocurrency, especially Dogecoin, which currently holds a market cap of over $60 billion.
Musk has even called himself “Dogefather” in the past. Dogecoin has been rising because especially since Musk asked people on Twitter if Tesla should accept bitcoin and that he is working with Dogecoin developers to “improve system transaction efficiency. On the other hand, Bitcoin recently suffered a huge dent in its rally after the SpaceX founder stepped up his criticism of the currency as environmentally unsustainable.
He tweeted that Tesla Inc had stopped accepting bitcoin to purchase its vehicles due to climate concerns on Thursday morning. After Musk’s tweet, Bitcoin plunged as much as 17%. He said in a tweet that he worries about “massive use” of coal and other carbon-intensive energy to generate the electricity needed to mine digital currency.
On the other hand, he signalled his support for Dogecoin and after his tweet about working with Dogecoin developers to “improve system transaction efficiency, the currency surged from 43 cents to over 50 cents apiece. The tech billionaire was recently questioned regarding this changed stance by a Twitter user.
Working with Doge devs to improve system transaction efficiency. Potentially promising.— Elon Musk (@elonmusk) May 13, 2021
In a Twitter exchange, the user asked why is the Tesla CEO not creating his own cryptocurrency that matches all his requirements. “Why not just make a crypto from scratch that does everything you want technically and has a lot of dev support and doesn’t have high concentration of ownership at least initially?” Musk was asked.
In reply to the question, Musk said, “Only if Doge can’t do it. Big pain in the neck to create another one.” Looks like Musk is currently pinning all his hopes on Dogecoin, originally created as a joke between two engineers.
Only if Doge can’t do it. Big pain in the neck to create another one.— Elon Musk (@elonmusk) May 16, 2021
Note that according to data centre provider TRG, Dogecoin consumes 0.12-kilowatt hours of electricity per transaction compared with 707 for bitcoin. The token, whose logo features a memed Shiba Inu dog, has surged this year to become the fourth-largest cryptocurrency with a total value of $68 billion, according to CoinMarketCap. At the moment, few major companies accept Dogecoin for payment, and its supply is unlimited.
It is worth adding that Musk’s tweets have influenced the value of Bitcoin as well as Dogecoin. In February, a series of tweets by Musk, hailing Dogecoin, took the value of the meme-based cryptocurrency to wild levels. The following momth, the value of Bitcoin rose to a then all-time high of $60,000 (roughly Rs 43 lakhs) after he announced that Tesla would accept the cryptocurrency as a mode of payment.
The SpaceX CEO recently made an appearance on Saturday Night Live, a comedy sketch show, where he said the Dogecoin was a “hustle”. Following Musk’s remarks, the digital currency, that rallied massively over the past few months, plunged by over a third of its value.
For the unversed, created in 2013 by software engineers Billy Markus and Jackson Palmer, the digital currency, like Bitcoin, offers recourse to the inadequacies of traditional banking systems. Created mainly as a joke, Dogecoin has now become a household name. This is partly due to the Shiba Inu-based meme currency itself and partly due to endorsements from celebrities such as Tesla CEO Elon Musk and rapper Meek Mill.