The value of Dogecoin (DOGE -1.05%) plunged as much as 11% on Wednesday as yesterday's pop wears off. Shares are down 8.9% in the past 24 hours and off about 20% from its Tuesday peak.
Shares of Dogecoin jumped over 40% early on Tuesday after Elon Musk tweeted that Tesla will make some merchandise buyable with Dogecoin. The Tesla CEO has been a key proponent for Dogecoin, and this is the first time he's brought up a real utility for the cryptocurrency. That said, merchandise is a small utility and even that may not last long.
The move in the second half of Monday and into Tuesday was simply giving back the gains from Musk's tweet. And considering that most cryptocurrencies are down this week, it's no surprise to see the value of Dogecoin fall as it moves closer to where it traded over the weekend.
Volatility is common in cryptocurrency, but Dogecoin has been one of the most volatile since last spring. Values have jumped, primarily on Musk's tweets, but the value of Dogecoin has been in decline since May as people find few uses for the coin outside of trading. That could be a challenge for this cryptocurrency long term, and without any real utility for it, I'll be staying out of Dogecoin for now.