The actions of the big players in the crypto market have a significant impact on price movements. It’s no doubt that Elon Musk has an effect on the crypto market. Musk’s Tweets on cryptocurrency cause real-time price movements.
In late January 2021, Elon Musk changed the description of his Twitter handle to #bitcoin. As expected, his action had a positive impact on the value of Bitcoin. The value of Bitcoin increased by 13 percent within a few minutes according to The Block.
At the beginning of February 2021, the crypto world was excited when Elon Musk, Tesla’s CEO, announced that his company purchased $1.5 billion in bitcoin tokens. According to Musk, the company bought the Bitcoin “to diversify further and maximize returns on our cash.”
On March 24, 2021, Musk tweeted that Tesla would accept Bitcoin as a means of payment for its products. “You can now buy a Tesla with Bitcoin,” he tweeted.
This announcement propelled the value of bitcoin (and altcoins) to new heights. Crypto enthusiasts hoped that more big companies and billionaires would buy cryptocurrencies and maybe adopt them as a means of payment.
Elon Musk’s effect on Dogecoin
Just as Musk’s tweets impacted Bitcoin, his takes on Dogecoin have had significant effects on the coin’s value. Some of these tweets were later referred to as jokes by Musk. However, one thing is obvious – his “jokes” cause crypto lovers to take action.
The Dogefather— Elon Musk (@elonmusk) April 28, 2021
SNL May 8
As a public figure, his positive opinion on cryptocurrency means an endorsement. The downside, however, is that negative comments from him can crash the market.
In one of his tweets where he referred to himself as the “Dogefather,” the coin’s value surged by 10 percent, adding over $3 billion to its market cap. Each time he tweeted in support of Doge, its value increased. The billionaire crypto supporter called Dogecoin his “fav” crypto and in another tweet he referred to it as”the people’s crypto.”
Dogecoin is the people’s crypto— Elon Musk (@elonmusk) February 4, 2021
The value of Dogecoin was affected negatively on the day Musk made a comment that was perceived as a “negative.” Dogecoin lost over a third of its value after he called it a “hustle.” He made this comment during the SNL comedy show. In a nutshell, Dogecoin’s market value has been influenced repeatedly by Musk’s opinions.
The Elon Musk Effect and the Crypto Market at Present
Recently, the billionaire crypto enthusiast announced that his company, Tesla, wouldn’t accept payment in Bitcoin any longer. His decision is based on the fact that Bitcoin mining is not environmentally friendly.
He said that the Bitcoin mining process has the “worst emissions of any fuel.” Though he went on to assure the crypto world that the electric carmaker would continue to maintain its Bitcoin portfolio until miners adopt eco-friendly energy sources.
Musk’s announcement caused a decrease in the value of Bitcoin by 14 percent. In the same vein, the value of altcoins dropped significantly.
The crypto world reacted fiercely to Musk’s “on and off” take on cryptocurrency. Many accused him of exploiting his power to sway the market.
Another Billionaire crypto lover, Mark Cuban, responded to Musk’s tweet by maintaining his support for Bitcoin, stating that his company will continue to accept payments in crypto.
“We at Mavs.com will continue to accept BTC/Eth/Doge because we know that replacing Gold as a store of value will help the environment and shrinking big bank and coin usage will benefit society and the environment,” Cuban tweeted.
In response to Musk’s announcement, the billionaire twins, Tyler and Cameron Winklevoss, maintained a bullish position. Cameron Winklevoss said that Musk would reconsider his position. “When Elon realizes that bitcoin mining is actually pushing the renewable energy industry forward, he will refresh position and #bitcoin will moon,” he said.
Conclusively, Elon Musk has an effect on the crypto market. Musk’s positive comments and actions lead to value appreciation. On the other hand, his actions perceived as “negative” lead to instant value depreciation in the crypto market.