Exactly one month ago, Dogecoin (CCC:DOGE-USD) prices shot up following an announcement from Elon Musk. The man hailed as the “Dogefather” confirmed that Tesla (NASDAQ:TSLA) was going to start accepting the popular meme coin as payment for company merchandise. This news sent Dogecoin price shooting up as investors pondered what the future would bring for both the original meme coin and for Tesla stock. Today, as we watch Dogecoin prices surge on the first day of Tesla accepting it, we have our answer. And while the patterns that we’ve seen from Tesla stock haven’t been so exciting, there’s no reason for investors to worry.
What’s Happening With Tesla Stock
The first two weeks of 2022 have been marked by turbulence for the electric vehicle (EV) innovator. Today’s news hasn’t helped in this regard. As of this writing, Tesla stock is down 0.83% for the day and looks ready to close out this week on a low note. However, the gains it experienced a few days ago are keeping it in the green by 2.4% for the week. Shares remain up almost 7% for the month, spurred by the growth the stock experienced earlier in the new year.
Dogecoin, on the other hand, has reacted well to the news of the day. It is currently up almost 9%. Despite its dip yesterday, the crypto remains in the green for the week by more than 24%. Given the plunge that Dogecoin experienced on Jan. 10, this is welcome news for investors.
Why It Matters
To the untrained eye, this news might seem to be only benefitting one involved party. Everyone should remember, though, that Tesla stock is currently grappling with other market forces. The general momentum isn’t working in its favor today. As was the case yesterday, fellow EV producers Rivian (NASDAQ:RIVN) and Fisker (NYSE:FSR) have also been watching their shares decline all day. Additionally, Tesla’s recent decision to delay the launch of its electric Cybertruck is raising some eyebrows among investors.
While EV buffs aren’t happy that they’re going to have to wait another year for the Cybertruck, it shouldn’t worry investors. Musk is known for missing deadlines, but through it all, Tesla has maintained its spot at the front of the EV race. And despite its turbulent December, Tesla stock remains in the green by more than 57% for the past six months. Investors have plenty to be optimistic about, particularly if the company secures its expansion into India. If it involves bad public relations, Tesla is very likely to shake it off easily.
While it may not receive much coverage, Tesla does offer quite a bit of company-themed merchandise. Now that it’s accepting DOGE, it’s opened itself up to a new range of shoppers. As InvestorPlace’s Joel Baglole recently laid out, “a whistle shaped like Tesla’s Cybertruck costs 300 Dogecoin. At current prices, that comes out to about $59. A commemorative belt buckle to celebrate Tesla’s Gigafactory in Texas can be bought for 835 DOGE, or about $164.”
What It Means for Tesla Stock
While merchandise doesn’t represent a significant portion of Tesla’s sales, accepting Dogecoin will only help boost its social media traction. Dogecoin is the meme token that launched the pupcoin frenzy — it’s well known that it is powered by a strong digital army. When the Dogecoin army gets tweeting, they can help prices rise. The way it looks from here, Tesla only stands to see both its merch sales and social media buzz increase.
Perhaps most importantly, this decision from Tesla helps lend further credibility to Dogecoin. Musk has tweeted that he owns the crypto, but accepting it as payment demonstrates that the meme coin has real world utility.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.