Dogecoin jumped more than 34 percent Friday after Tesla CEO Elon Musk called the canine-inspired cryptocurrency “potentially promising,” even as Coinbase separately said it plans to list it on its exchange.
The Coinbase crypto trading app said late Thursday that it planned to list Dogecoin in the next six to eight weeks. That boosted the price of the coin, which was already on the rise after Musk’s tweet, as it raises the prospect of it becoming more widely and easily traded.
Dogecoin is now the fourth-largest cryptocurrency by market cap, according to Coinbase. After Musk’s tweet Thursday evening, the coin added over $10 billion to its market cap, which now stands at about $68 billion.
The tech billionaire’s tweet about Dogecoin came after Musk announced on Wednesday that Tesla would no longer accept Bitcoin as payment for its electric cars over concerns about the use of fossil fuel for bitcoin mining. Musk said the company was looking at other cryptos that consume less energy per transaction — and his tweets on Thursday evening signaled to some that Dogecoin might be a candidate.
“Working with Doge devs to improve system transaction efficiency. Potentially promising,” Musk tweeted.
The carmaker made headlines and sparked a rally in the crypto market after it announced in February that it purchased $1.5 billion worth of Bitcoin and would accept that digital currency as payment.
But when Musk said earlier this week that the company would halt its acceptance of Bitcoin it sent the price of the cybercurrency plummeting, along with the broader crypto market.
He followed that surprise announcement up with another tweet, saying, “To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal.”
The serial entrepreneur’s U-turn was met with sweeping criticism, as Musk has long touted cryptocurrencies and Bitcoin, in particular. The environmental toll of Bitcoin mining and that of other cryptocurrencies has been well documented for years.
Musk’s Thursday plug for Dogecoin also came after his eyebrow-raising statement on “Saturday Night Live” when he called the digital coin “a hustle,” which sent the price down sharply.
Anthony Denier, CEO of trading platform Webull, said that Musk’s ability to command market movements in the crypto space is evidence of a bubble.
However, he also said that rising acceptance of Bitcoin on Wall Street is also proof that crypto is here to stay — while adding that environmental concerns over Bitcoin are legitimate and that other cryptocurrencies have found ways to reduce their impact.
Bitcoin plummeted as much as 14 percent after Elon Musk said Tesla suspended use of the cryptocurrency as payment for its vehicles. REUTERS/Dado Ruvic“Based on Bitcoin’s environmental impact, this should serve as a wakeup call for others who use and accept the currency, as more people taking the same view could have big repercussions for Bitcoin,” Denier said in an email to the Post.
“However, other cryptocurrencies have found more efficient ways to mine their coins, so, this might spark a change in the way Bitcoin is produced, which could be a net positive.”
