Tesla CEO Elon Musk has reiterated his support for Dogecoin, claiming that the Bitcoin parody has the potential to become a currency in a recent tweet.
Musk has repeatedly called the meme coin “people’s crypto” to highlight its widespread appeal.
Because of its inflationary mechanism, Dogecoin is a viable currency since it encourages people to spend more. People are unlikely to hoard the meme coin since it doesn’t function as a store of value.
Bitcoin, on the other hand, is a disinflationary currency, which makes it “not a good substitute” for transactional currency, according to Musk.
That said, the Tesla boss has previously expressed doubts as to whether Dogecoin will be able to replace fiat.
Last month, Robinhood CEO Vlad Tenev opined that Dogecoin was a much cheaper alternative to popular card networks. For this to happen, the meme coin’s block time has to be reduced to ten seconds.
Meanwhile, Dogecoin has now plunged more than 91% from its peak, which was achieved one year ago. The meme cryptocurrency saw a short-lived price spike after Twitter finalized its deal with Musk. However, the meme cryptocurrency then plunged lower together with the rest of the market. Earlier this week, its price dropped below 10 cents.
In the tweet that attracted Musk’s attention, Billy Markus, the co-founder of the joke cryptocurrency, says that he likes the joke cryptocurrency because “it knows it is stupid.”