There are a lot of factors that influence the price of cryptocurrencies, and one of those things no one in the world dreamed about having so much influence has a lot to do with a social network called Twitter. Actually, it cannot be referred to as a “thing” since it is a person, Elon Musk. His posts were the ones that made the market even more volatile and turbulent. His tweeting was fun and amusing to many as his publications and activities affected the growth of cryptocurrency values. However, when the situation with the prices got serious, and people started losing money, all of a sudden it looked as he stopped having fun.
Let’s get one thing clear in the beginning. Investing in cryptocurrencies carries a huge risk. Although the potential gain is many times higher than investing in stocks in funds, tons of people have been made rich and on the other hand burned in recent years by investing in bitcoin, ether, and other cryptocurrencies. Various factors affect the value of such digital assets, so many people choose to use automated apps to increase their chances of profit. To read about those, click here. To return to the factors which influence the prices, we already mentioned how Musk was one of them. As he is considered something like a financial guru by many (given the fact that he was on the top of the richest people on the planet list, until recently) he has been responsible for the biggest ups and downs on the market, especially last year.
People who don’t have that much experience with investments literally followed his every post with great interest, and many have fallen to the trap of investing in Bitcoin when he announced the possibility of buying Tesla’s cars with it. This post was also followed by a company buying large quantities of bitcoin. Another bait he placed on the same social network was about dogecoin. It took only one praising post for the value of this coin to increase immensely. This was ok because it left many investors with profit in their pockets.
Everyone was happy, his posts were made even more credible, but soon after there was a cold shower for everyone. He first joked about dogecoin and then wrote that his company would no longer accept bitcoin when buying a car. The reason behind his relationship with bitcoin ending – is the bad impact mining has on the environment. The value of crypto plummeted in a short time, with many losing all the profits they had made in recent months in just a matter of hours or days.
Even though nobody liked what happened, one has to admit that he is right about the environmental issue. It is estimated that mining, on the annual basis, consumes as much energy as a country like the Netherlands would spend in a year. His post about this issue immediately caused a 10 percent drop in the value of bitcoin, which, naturally, affected a huge dissatisfaction of a growing number of investors in this coin. Few people were satisfied with this reason, especially after it was announced that his company had bought bitcoins worth a billion and a half dollars before accepting the cryptocurrency as an official means of payment.
However, as much as we would like to blame him for everything, he is not the only reason for the decline in value. This already volatile market was influenced by other factors such as the Chinese government’s decision that financial institutions should not participate in cryptocurrency-related transactions. This fired a deadly blow to many other coins that were on the rise and expected to climb even higher on the scale of the top investments. But some people still see Musk as one of the main culprits: People who blindly followed him lost a lot of money.
Many criticize his pumping of dogecoin, or “cryptocurrency meme” because they believe that their value is growing only thanks to Musk and his famous posts. However, it is still not quite clear about what Musk’s perspective is with dogecoin, and many people in the world would confirm this. On the basis of what parameters he believes (this much) this coin has such value and perspective on the market?
The survey found that the number of investors in cryptocurrencies will double this year, and until its end.
One of the problems investors have with Musk is that his tweets about dogecoin and bitcoin affect not only those cryptocurrencies but the entire crypto market. Being rich and influential, many see him as a role model and believe whatever he writes about is nothing but the truth. However, serious investors believe that they have a solution to this problem, and that is for them to stop posting on this topic. They also tell everyone who invests in this market not to pay attention to him and his tweets. Another solution would be to ban him from the network, entirely, just as was with the case of Trump.
Everyone with a little bit of common-sense present would figure out that his love and hate relationship with digital coins is either some kind of experiment, personal amusement, or paid marketing (which is a bit unlikely, since he’s loaded). At one point he even announced that SpaceX would accept dogecoin as a means of payment for a mission to the moon scheduled for this year. And that came just hours after he called dogecoin on the popular TV show – a scam. So, it is quite certain that he has made a lot of money in those weeks, probably because of the reasons we have mentioned previously in the text.
After all this, what is possible to expect?
Given the talks about the environment, it is possible to expect a new kind of coin on the market. Something that will have to do with clean energy, and the proof it was mined with minimum impact on the planet. The time will show will this be the new trend on the crypto market.