In a year that has seen many downturns across the board in the crypto markets, it is astounding to some people that Tesla and SpaceX companies owned by Musk have continued to accept Bitcoin and Dogecoin as forms of payment.
Since cryptocurrency's all-time high valuations of three trillion dollars, cryptocurrency markets have fallen to less than a third of that amount in less than a year.
Many companies that were early adopters supporting payment in cryptocurrencies have abandoned them, and companies like Meta have abandoned their cryptocurrency venture.
Tesla's journey as an early adopter of Bitcoin
At the beginning of 2021, CNN reported that Elon Musk's company Tesla invested $1.5 billion in Bitcoin. A month later, the company also started accepting the altcoin as payment for its electric vehicles.
Tesla reversed its decision after receiving pushback from the public in response to concerns raised about the impact of Bitcoin use on the environment.
However, it did not sell any of its Bitcoin holdings and continued accepting cryptocurrency payments for goods and services purchases.
Tesla abandons Bitcoin
Bitcoin has experienced a steep downturn over the last year. According to the report published by Forbes, Tesla "liquidated almost all of its Bitcoin holdings" last month as a response to the decline in the value of cryptocurrencies and the accompanying economic uncertainty. Paleja doesn't think that we should be surprised by this.
In the past, Elon Musk, the CEO of Tesla, has made no secret that he is a supporter of cryptocurrencies. Some writers, such as Ameya Paleja, who writes for InterestingEngineering.com, would even go as far as to describe Musk as the 'cryptocurrency industry's poster boy.' However, Paleja observes that Musk's support for Bitcoin now seems to be waning.
What surprises journalists is that Musk continues to express confidence in Dogecoin, a cryptocurrency he has endorsed and promoted on multiple occasions
You can still buy Teslas with Dogecoin.
In an interview, Musk said he likes 'Dogecoin because it does not take itself too seriously.'
Why does Elon Musk like Dogecoin?
It's interesting that Elon Musk likes Dogecoin as he once got into an argument with one of the people who created Dogecoin, who, when referencing Musk's coding abilities, called Musk "a tool." Musk appreciates Dogecoin because it doesn't take itself too seriously, and it looks like the feeling is mutual. Being insulted by the founder of Dogecoin hasn't impacted Musk's admiration for it.
Dogecoin features "memes and dogs" and "a sense of humor."
Musk believes that "memecoin," the original name that was going to be used for the cryptocurrency, has a higher "total transactional throughput capacity" than Bitcoin.
Musk, who has shown previous support for Dogecoin, intends to continue buying it and will continue publicly saying positive things about it.
Is Musk's support of Dogecoin wise?
Even with all of Musk's spoken admiration for it, the price of Dogecoin has remained relatively unchanged at around six cents, a significant drop from its all-time high of seventy cents a year ago. Dogecoin is different from other leading cryptocurrencies because Dogecoin has an unlimited supply. Dogecoin can be minted indefinitely. What drives Dogecoin's price is the community. Dogecoin is moved by popularity. It started as a joke coin. Gareth Vaughan wrote that it lacks a serious use case supporting wide adoption.
Critics of Musk have also accused him of engaging in racketeering to inflate the price of Dogecoin artificially. The Dogecoin price has often risen after Musk has tweeted about it.
Musk's continued faith in Dogecoin is surprising as the original developers have been away from it for a long time. However, a number of other people are still developing the cryptocurrency.
According to a report by Forbes, a modification made to the Dogecoin blockchain in June was expected to make the cryptocurrency safer and more efficient
In a piece he wrote about Dogecoin in May of 2021, Gareth Vaughan observed that it is highly likely that Dogecoin will continue to play a role in the narrative of cryptocurrencies in the long run. Mania contributes to the volatility of the dogecoin market. Because of its long history of self-awareness and its simplicity, DOGE is an appealing tool for expressing humor.
Thorn and Helmy are cited by Vaughan as saying, "According to what Aristotle said, "the gods too are fond of a joke," and it's clear that the cryptocurrency gods continue to favor Dogecoin. DOGE will likely continue to exist for as long as Bitcoin does and for as long as people find jokes funny. It is possibly the most' gallows humor' investment vehicle that has ever been created, making fun of a frothy market with its playful indifference, and it has the potential to be very profitable." If Musk is correct, we won't know for sure until more time passes.
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