Meme-based cryptocurrency dogecoin jumped 18% to above $0.20 on Friday, after Tesla’s chief Elon Musk said the electric carmaker will accept it as payment for merchandise.
“Tesla merch buyable with Dogecoin,” Musk tweeted.
This huge spike in price caused Dogecoin traders who are shorting the coin to lose more than $11.69 million to liquidations. The figures were much higher than liquidations on bitcoin or ether futures, which usually see the most losses among all cryptocurrencies.
Nearly 65% of the liquidations stemmed from short trades, or from those betting on the downside, accounting for over $7.66 million in losses. Leveraged traders betting on an upside lost another $4 million on margin calls, according to a report by Coindesk.
Data from analytics tool Coinglass showed 60.81 million dogecoin was liquidated across various crypto exchanges. Futures products tracking the memecoin on OKEx saw over $7.71 million in liquidations, while similar products on Binance saw $2.75 million in liquidations.
As for what merchandise specifically can be bought with Dogecoins, Tesla’s website listed a cyberwhistle for 300 Doge on its website, while 12020 Doge will buy a Cyberquad for kids.
The support page on Tesla’s website says that customers must have their own dogecoin wallets set up to pay with the cryptocurrency, and any payment through any other digital currencies may result in loss or destruction of the asset.
It isn’t the first time Musk has held Dogecoin fortunes in his hands. His mid-December tweet saying such use of dogecoin will be allowed on a test basis sent the cryptocurrency up more than 20%.
Musk’s tweets on the cryptocurrency, including the one where he called it the “people’s crypto”, buoyed the meme coin and caused it to soar roughly 4,000% in 2021.
The dogecoin is known to consume less energy than bitcoin. According to data from TRG Datacenters, dogecoin uses 0.12 kWh of energy per transaction, in comparison to bitcoin and Ethereum, which consume 707 kWh and 62.56 kWh per transaction respectively.
Currently, dogecoin has a market cap of $25.6 billion, and is the 11th largest cryptocurrency coin in the world, according to CoinMarketCap data.