Tesla CEO Elon Musk publicly announced that he and his company own a few cryptocurrencies. These digital currencies include Dogecoin, Ethereum and Bitcoin. Being an influential man, his followers across social media platforms quickly wanted to know which currency was the billionaire’s favorite.
In July 2021, Musk confirmed that Dogecoin was his preferred digital currency. This announcement didn’t come as a shock since he had repeatedly mentioned how he worked with the developers. Software engineers Jackson Palmer and Billy Markus founded Dogecoin in 2013. The primary objective was to create a faster and more fun alternative to Bitcoin.
Why Did Elon Musk Choose Dogecoin?
Musk repeatedly mentioned he found it ironical that Dogecoin was created as a joke but instead will turn out to be the future currency of the world. His choice was also supported by the fact that majority of his workers at Tesla and Space X own Dogecoin. Because these individuals weren’t financial experts or economic enthusiasts, he identified the digital currency as a people’s crypto.
Compared to Bitcoin and other digital currencies, Dogecoin is the best coin to transact with. Musk argues that Bitcoin isn’t an ideal substitute for transactional currency. The reason is that the transaction volume is very low. In turn, associated costs of transactions are high. Therefore, Bitcoin is preferable as a store of value but not for transactions.
Comparatively, Dogecoin encourages its users to spend and not hoard their value. Its transaction costs are way lower hence friendly for a stable financial system. If you are looking into buying crypto, maybe starting with Dogecoin may be the way to go. After all, Musk is known for his prowess in making financial assessments in the past.
Was There Any Change After the Announcement?
As expected, Musk’s public support of Dogecoin caused a ripple effect in the crypto world. For status, due to Musk’s partnership with Dogecoin developers, Tesla users can now use the coin to shop for specific merchandise. Dogecoin is now included in Tesla’s payment options. However, there wasn’t a mention of when this system would commence. Nonetheless, Doge recorded a surge by 11.95%. This increment saw the coin trade at $0.1926.
In the past, Bitcoin held the first spot in the digital currency world. At the time, Musk had announced that tesla would also incorporate Bitcoin into its payment system since it was more popular and widely accepted. This news caused an increase in the price of Bitcoin.
Several days later, Musk announced that he had changed his mind. Bitcoin would no longer be used to purchase electric cars. In turn, Bitcoin prices crushed. The reason why Musk changed his mind to use Bitcoin was because of the climate change controversies associated with the coin. A lot of energy is required to mine Bitcoins. Unfortunately, this high energy consumption causes negative effects to the environment.
Similarly, in the past, Musk posted images of a Shiba Inu puppy. The effect was an increase in the price of the crypto, Shiba Inu. His followers also strongly believed that Shiba Inu was his preferred crypto. Shiba Inu grew and became the 11th largest cryptocurrency in the world. However, this wasn’t true. Musk revealed that he didn’t own any tokens from Shiba Inu. The crypto then fell to the 13th position in the globe.
To sum it up, Elon Musk’s favorite cryptocurrency is Dogecoin. He argues that it is better for transactions and it’s a people’s crypto.