A day after revealing that Tesla Inc. would stop accepting bitcoin as payment for its cars, Tesla Chief Executive Elon Musk suggested Thursday that another cryptocurrency, Dogecoin, could be turned into a suitable replacement.
“Working with Doge devs to improve system transaction efficiency,” Musk tweeted. “Potentially promising.”
Dogecoin DOGEUSD, +24.53% prices immediately shot higher, after bitcoin BTCUSD, -0.37% took a large hit in the wake of Wednesday’s announcement. Tesla’s TSLA, -3.09% purchase of $1.5 billion in bitcoin and acceptance of the cryptocurrency as a payment option was seen at the time as a sign of growing institutional acceptance of crypto.
While bitcoin has been seen as a potential payments option since its inception, Dogecoin was largely conceived as a joke. The crypto has seen a stunning increase, however, since Musk adopted it as a meme and began tweeting about it earlier this year, including strong gains last week before the billionaire’s guest-hosting appearance on “Saturday Night Live.”
Immediately after Musk’s tweet Thursday, Dogecoin prices jumped from less than 43 cents apiece to more than 50 cents. Bitcoin declined from about $54,500 a coin to less than $50,000 in the 24 hours after Musk’s announcement of Tesla’s move.
Tesla stock was up a tick in after-hours trading, after falling 3.1% to $571.69 in regular trading. Shares closed below Tesla’s 200-day moving average Thursday for the first time in more than a year, and have now declined 19% so far in 2021, as the S&P 500 index SPX, +1.22% has gained 9.5%.