Dogecoin jumps 9% after Elon Musk says it can be used to buy Tesla merchandise

SpaceX owner and Tesla CEO Elon Musk arrives on the red carpet for the Axel Springer Award 2020 on December 01, 2020 in Berlin, Germany.

Britta Pedersen | Getty Images

The price of dogecoin jumped more than 15% on Friday before paring gains after Tesla began accepting the cryptocurrency as payment for some merchandise.

Early Friday, Tesla CEO Elon Musk said on Twitter that the electric carmaker’s merchandise can be purchased with dogecoin.

Dogecoin topped $0.20 a coin at around 01:19 ET before paring some of those gains, according to Coindesk data. It was up more than 9% at $0.18 at 07:06 ET.

Only a small number of items were buyable with the cryptocurrency, which originally started life as a joke coin.

A whistle shaped like Tesla’s Cybertruck costs 300 doge, which is equivalent to about $59 at the time of writing. A commemorative belt buckle to celebrate Tesla’s Gigafactory in Texas was going for 835 doge, or about $164.

Plans to accept dogecoin as payment have been in the works for a while. In December, Musk tweeted that “Tesla will make some merch buyable with Doge & see how it goes.”

No returns with dogecoin

There are a number of terms and conditions that come with using dogecoin to buy merchandise from Tesla.

Users will need a dogecoin wallet to transfer the digital money to Tesla. Furthermore, if “an order is overpaid in Dogecoin, the overpayment amount will not be refunded to the original form of payment,” according to company’s website.

Tesla warns that it can take up to six hours for the dogecoin network to confirm the payment.

And the company says that any orders paid for in dogecoin cannot be canceled or refunded. Normally, if a person buys Tesla merchandise through the official store via traditional payments methods, it can be returned within 30 days of receiving the product.

It’s not the first time Tesla has accepted a cryptocurrency as payment. Last year, Tesla bought bitcoin worth $1.5 billion at the time and said it planned to accept purchases using the cryptocurrency. Musk later stopped accepting bitcoin over environmental concerns. The bitcoin network, through a process called mining, uses large amounts of energy.

Dogecoin uses significantly less energy, according to analysis by TRG Datacenters. Musk said last year that he would work with dogecoin developers to improve the efficiency of transactions.

Correction: This story has been updated to reflect that Elon Musk tweeted on Friday.

Source: CNBC

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