Seem Musk’s tweets, either they are serious or goofy, always have some impact on the price of cryptocurrencies. However, while cryptocurrency becomes more mainstream, the market gradually calms. As Ethereum co-creator Vitalik Buterin predicts that the crypto market will develop an “immune system” against such social media impacts, jaded crypto investors hope that it will reduce the infamous volatility of the cryptocurrency market.
The infamously volatile cryptocurrency market is very susceptible to the changing of social media moods. Huge price fluctuations are common there, but there’s a clear trend emerging last year: whenever Tesla CEO Elon Musk tweets about a cryptocurrency, the price of coins usually rises to the Moon or drops like a stone.
Having 57 million Twitter followers, Musk has entered the cryptocurrency community, positioning himself as a crypto optimist and boosting the rates of Bitcoin and Dogecoin.
Especially he’s a hero to Dogecoin investors, as his frequently shared memes and silly tweets often result in a notable price surge for this ‘meme-coin’.
As the multi-billion firm’s CEO, Musk’s attention to Dogecoin might surprise some investors. He has called himself the “former CEO of Dogecoin” and “The Dogefather” and even planned to sell an NFT original music video inspired by DOGE.
Musk first came out as a Dogecoin fan in March 2020 and has since tweeted about it many times, causing a surprising price surge after. In February 2021, as Musk tweeted a Lion King-inspired Dogecoin meme, the price boosted more than 50%. When he played a Dogecoin cameo for his May Saturday Night Live hosting gig, the price stepped up more than 20%. By now, Dogecoin’s price is more than 5,800% up since the start of 2021, as Musk’s continued to impact. Though, not every Musk tweet boosts the meme-coin: Doge hype deflated more than 30% after his SNL joke that it was a “hustle.”
However, Musk’s recent playing with the Bitcoin market has turned some fans against him, as the price has significantly dropped after the big news about suspending the cryptocurrency acceptance shared by Tesla’s CEO.
Musk firstly had a positive impact on Bitcoin’s price. Tweeting occasionally about Bitcoin since 2020, he started a trend among other influencers. In January 2021, he even changed his Twitter profile to “#bitcoin,” which, according to the Blockchain Research Lab study, caused a 19% increasing Bitcoin’s price over seven hours.
In February 2021, Musk made the price of Bitcoin fly high when he wrote that Tesla had purchased $1.5 billion funds of the cryptocurrency to hold as a reserve asset, and announced that the Tesla company would accept BTC payments for its electric vehicles. Soon after, Bitcoin’s price rose by more than 10%, hitting a new all-time high price, and continued climbing in the next days and weeks.
However, that momentum came fading in May, when Musk announced that Tesla would suspend accepting Bitcoin payments due to the environmental impact of Bitcoin’s mining. After Musk’s tweet, Bitcoin’s price quickly dropped from around $55,000 to about $48,000 within 24 hours, and later has recent lows around $32,000.
As a result, Musk has lost some of his crypto fans, but to be honest, he has helped push the price back up soon. Last week, when he tweeted that Tesla could eventually resume accepting BTC once 50% of the mining powers go green, Bitcoin’s price is up again more than 20%.
How long will it last? As cryptocurrency becomes more mainstream, the market fluctuations will be slowly declining. Vitalik Buterin, Ethereum co-creator, recently told CNN that he believes the crypto market will gradually develop an “immune system” against such social media impacts. “Elon is not going to have this influence forever,” he stated. Hopefully, to jaded crypto investors, this prediction will be right.