‘Much Higher Potential’—Elon Musk Reveals Why He’s Backing Dogecoin Over Bitcoin And Ethereum Amid Huge Crypto Price Crash

Elon Musk, Tesla

The billionaire who helped “joking” bitcoin rival Dogecoin become a major cryptocurrency this year has explained exactly why he is backing memecoin over the likes of bitcoin, ethereum and other cryptocurrencies.

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Bitcoin has fallen sharply over the past month, losing about 25% of its value and hitting the price of Ethereum and most other major cryptocurrencies – including meme-based Dogecoin.

Musk speaks to time magazine after his name the time 2021 Person of the Year, said he believes Dogecoin is more transaction-friendly than Bitcoin and has “much higher potential.”

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“Bitcoin is an interesting example and the main driver of this,” Musk said. Video Shared on Twitter by time.

“Bitcoin transaction volume is low and cost per transaction is high. Bitcoin is probably suitable as a store of value but basically Bitcoin is not a good alternative to transaction currency. Although it was created as a ridiculous joke, dogecoin is better suited for transactions,” Musk said, explaining, “The total transaction flow that you can do with Dogecoin, daily transactions, is much higher [than bitcoin] And it has much higher potential.”

Musk, who also told the magazine that he does not believe that Dogecoin, Bitcoin, Ethereum, or any other cryptocurrency will completely replace fiat currency, now said Via Twitter That “Tesla will make some merchandise purchasable with Doge and see how it goes,” follows in the footsteps of fellow dogecoin supporter and tech investor Mark Cuban who added dogecoin support for Dallas Mavericks NBA team merchandise in March.

The price of Bitcoin has risen over the past 12 months as traders and investors bet that it will act as a hedge against inflation caused by massive government stimulus measures Covid-19. In May 2020, famed macro investor Paul Tudor Jones made headlines when he revealed that he believes bitcoin is “the fastest horse to beat inflation.”

However, Musk said he believes that the inflationary nature of Dogecoin can help it dominate the crypto payments space.

“Dogecoin is slightly inflationary, but this inflationary number is a fixed number against a percentage,” Musk said. time this week. “And that means over time the percentage of inflation is actually declining. And that’s a really good thing because it encourages people to spend instead of hoarding it as a store of value.”

Musk also said that his experience in the payments industry means he understands how the money system works better than most.

“I can really talk about the nature of money for hours because I played such an important role in creating PayPal,” he said. “My understanding of the money system at the most basic level of how it actually works, and the detailed mechanisms of it, very few people understand it better than I do.”

The massive rise in bitcoin prices, taking bitcoin from below $20,000 per bitcoin this time last year to all-time highs of nearly $70,000 last month, has helped boost the broader crypto market to a combined value of around $3 trillion.

However, Musk denied that his tweets were a factor in bitcoin and crypto price volatility even after his tweets had repeatedly boosted the price of the dogecoin over recent years, and his post stating that Tesla would stop accepting bitcoin payments due to concerns about its environmental impact on the bitcoin price. 15%.

“Markets move all the time on a nothingness basis as far as I can tell,” Musk said. “So the statements that I’m making, are they fundamentally different from the random movements of the stock that would happen anyway? I don’t think so.”

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Ethereum, the second largest cryptocurrency after Bitcoin, has surged 500% in the past 12 months, far outpacing the rise of Bitcoin amid increased interest in non-fungible currencies (NFTs) and decentralized finance (DeFi). Many of Ethereum’s competitors also rose as investors bet that they could win market share of ethereum.

Dogecoin, aided by support from the likes of Musk and other prominent investors and influencers, has surged 5,000% over the past year — although the price of dogecoin is now nearly 80% down from its all-time high in May before the famous Musk appeared on the Saturday comedy show. Night Live.

Since then, Musk has called on dogecoin developers to upgrade the meme-based cryptocurrency with faster transaction times and lower fees in order to “beat bitcoin.”

The broader bitcoin and cryptocurrency market remains highly volatile and has fallen sharply in recent weeks, wiping nearly $1 trillion in value from the common market.