Precisely one month in the past, Dogecoin (CCC:DOGE-USD) costs shot up following an announcement from Elon Musk. The person hailed because the “Dogefather” confirmed that Tesla (NASDAQ:TSLA) was going to begin accepting the favored meme coin as fee for firm merchandise. This information despatched Dogecoin worth capturing up as traders contemplated what the long run would convey for each the unique meme coin and for Tesla inventory. At present, as we watch Dogecoin costs surge on the primary day of Tesla accepting it, we have now our reply. And whereas the patterns that we’ve seen from Tesla inventory haven’t been so thrilling, there’s no cause for traders to fret.
What’s Occurring With Tesla Inventory
The primary two weeks of 2022 have been marked by turbulence for the electrical automobile (EV) innovator. At present’s information hasn’t helped on this regard. As of this writing, Tesla inventory is down 0.83% for the day and appears prepared to shut out this week on a low word. Nonetheless, the features it skilled a number of days in the past are preserving it within the inexperienced by 2.4% for the week. Shares stay up virtually 7% for the month, spurred by the expansion the inventory skilled earlier within the new 12 months.
Dogecoin, alternatively, has reacted properly to the information of the day. It’s at the moment up virtually 9%. Regardless of its dip yesterday, the crypto stays within the inexperienced for the week by greater than 24%. Given the plunge that Dogecoin skilled on Jan. 10, that is welcome information for traders.
Why It Issues
To the untrained eye, this information would possibly appear to be solely benefitting one concerned social gathering. Everybody ought to keep in mind, although, that Tesla inventory is at the moment grappling with different market forces. The overall momentum isn’t working in its favor right this moment. As was the case yesterday, fellow EV producers Rivian (NASDAQ:RIVN) and Fisker (NYSE:FSR) have additionally been watching their shares decline all day. Moreover, Tesla’s current determination to delay the launch of its electrical Cybertruck is elevating some eyebrows amongst traders.
Whereas EV buffs aren’t comfortable that they’re going to have to attend one other 12 months for the Cybertruck, it shouldn’t fear traders. Musk is understood for lacking deadlines, however by way of all of it, Tesla has maintained its spot on the entrance of the EV race. And regardless of its turbulent December, Tesla inventory stays within the inexperienced by greater than 57% for the previous six months. Traders have lots to be optimistic about, notably if the corporate secures its expansion into India. If it includes unhealthy public relations, Tesla may be very prone to shake it off simply.
Whereas it might not obtain a lot protection, Tesla does provide fairly a little bit of company-themed merchandise. Now that it’s accepting DOGE, it’s opened itself as much as a brand new vary of buyers. As InvestorPlace’s Joel Baglole not too long ago laid out, “a whistle formed like Tesla’s Cybertruck prices 300 Dogecoin. At present costs, that comes out to about $59. A commemorative belt buckle to have fun Tesla’s Gigafactory in Texas will be purchased for 835 DOGE, or about $164.”
What It Means for Tesla Inventory
Whereas merchandise doesn’t symbolize a good portion of Tesla’s gross sales, accepting Dogecoin will solely assist enhance its social media traction. Dogecoin is the meme token that launched the pupcoin frenzy — it’s well-known that it’s powered by a powerful digital military. When the Dogecoin military will get tweeting, they can assist costs rise. The best way it appears from right here, Tesla solely stands to see each its merch gross sales and social media buzz enhance.
Maybe most significantly, this determination from Tesla helps lend additional credibility to Dogecoin. Musk has tweeted that he owns the crypto, however accepting it as fee demonstrates that the meme coin has actual world utility.
On the date of publication, Samuel O’Brient didn’t have (both immediately or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.