Dogecoin jumped more than 34 percent Friday after Tesla CEO Elon Musk tweeted about the cryptocurrency — calling it “potentially promising.”
The tweet about Dogecoin comes 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 at the time that the company was looking at other cryptos that consume less energy per transaction.
“Working with Doge devs to improve system transaction efficiency. Potentially promising,” Musk tweeted Thursday evening.
The tweet sparked speculation that Tesla might one day accept Dogecoin as payment for its cars. 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.
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 was met with sweeping criticism after the move, which was seen as a U-turn 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, raising questions about why Musk just recently acted on it.
And Musk’s Thursday tweet about Dogecoin came after his eyebrow-raising statement on “Saturday Night Live” when he called the digital coin “a hustle,” which sent the price down sharply.
Also giving Dogecoin a boost, are comments that emerged on crypto exchange Coinbase’s first-quarter earnings call. The company said Thursday evening that it planned to list dogecoin in the next six to eight weeks.
Dogecoin is 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.
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.
“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.”