The meme-inspired cryptocurrency skyrocketed more than 20% Tuesday morning after Elon Musk said Tesla would accept dogecoin as payment for some of its merchandise.
Musk has frequently talked up dogecoin, calling it his favorite digital coin and mentioning it in an appearance on “Saturday Night Live.”
Dogecoin was initially started as a joke by its creators Billy Markus and Jackson Palmer in 2013. It takes its branding from the Japanese shiba inu dog which inspired the original “doge” meme.
Tweets from Musk and surging interest from a wave of amateur investors fueled a speculative frenzy in the cryptocurrency earlier this year, driving its price higher.
Dogecoin went from being worth just a fraction of a penny at the start of the year to notching a record-high price above 74 cents in May. It has since plummeted sharply — at just 20 cents a coin, the token is down over 70% from its all-time high.
“I’m actually not convinced … that dogecoin is good for the crypto market,” Brad Garlinghouse, the CEO of crypto firm Ripple, told CNBC last month.
Dogecoin recently found a rival in shiba inu, a so-called meme token that bills itself as a “dogecoin killer.” Shiba inu is currently the 13th-biggest coin by market value, having briefly surpassed dogecoin at one point.