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Dogecoin rose more than 40% early Friday after a tweet from supporter Elon Musk and, as Coinbase said, it would list the meme-inspired cryptocurrency.
The price of Dogecoin rose to an intraday high of around 55 cents at 2:30 a.m., according to Coin Metrics. It's still down 18% from a record high of almost 67 cents a week ago.
Musk tweeted Thursday that he is working with Dogecoin developers to improve transaction efficiency.
On Wednesday, Tesla's CEO surprisingly announced that his electric car company would no longer accept Bitcoin as a form of payment due to concerns about its environmental impact.
This resulted in a brutal sell-off of cryptocurrencies, including Dogecoin. Dogecoin had already fallen significantly after Musk's appearance on Saturday Night Live, in which he described the digital coin as "hustle and bustle".
Meanwhile, the crypto exchange platform Coinbase announced on Thursday that it would be offering Dogecoin support for the next six to eight weeks. Many crypto traders have chosen the zero-fee investment app Robinhood to trade with the meme token. Now Coinbase's move could lead to more trading activity.
Dogecoin is not taken very seriously by loyal Bitcoin supporters. It started as a joke in 2013, inspired by the "Doge" meme, but has since found a growing online community. Dogecoin is now the fourth largest crypto by market value on CoinMarketCap, valued at over $ 69 billion.
Financial experts warn that Dogecoin is a highly speculative asset. It has fueled concerns about a possible bubble in the crypto markets – although some economists would say that all cryptocurrencies are in a bubble.
Last week, Bank of England Governor Andrew Bailey warned crypto investors "be ready to lose all your money," reiterating a similar warning from the UK Financial Conduct Authority.
Bitcoin was marginally higher on Friday, with the world's largest digital asset gaining about 0.3% at $ 49,052. Ether, the second largest cryptocurrency, rose 3.6% to $ 3,805.