The crypto world is watched by millions of investors worldwide. Everyone wants to stay on top of the game and get good returns on investment. Therefore, It becomes natural that a mass of people will be following the same trend at the slightest inclination of incurring profit on the investment.
One such thing has been recently witnessed with the interest of Elon Musk into bitcoin and some other cryptocurrencies. His tweets have the power to positively and negatively influence the price of certain cryptocurrencies. It is essential to understand that Elon Musk is an entrepreneur so everything he puts forth on social media should be seen as primarily benefiting him rather than the masses.
In this article, we will be talking about Musk’s tweets and how they had a significant impact on the crypto market. We would also mention what experts think about this influence and what it could mean for investors.
A Series of Cryptic Tweets
Musk gained attention when he made some cryptic tweets about bitcoin and dogecoin. People immediately rushed to invest because they thought that there was something he was not saying. Dogecoin is a fairly new cryptocurrency which gained momentum because it was seen as a meme and many people invested in it as a joke. Musk’s involvement in the entire fiasco definitely led to a higher participation from many individuals around the globe.
Secondly, we will talk about bitcoin and just how much he was able to influence the market with his texting habits. The crypto market is in general, very volatile. Elon Musk took it a step further with his institutional investment into bitcoin which led to significant fluctuation in the prices.
He very well knows that people will read into his decisions and base their financial investments on them. His tweets, therefore, make him a clear winner on being the most influential person in relation to bitcoin and other cryptocurrencies. The volatility and performance of bitcoin can be seen through platforms like https://bitcoin-prime.cloud/.
Investment through Tesla
Elon Musk is the founder and owner of Tesla. When Tesla bought a huge amount of bitcoins worth US$1.5 billion, it took the market by storm. People rushed to buy bitcoins too because they could see the community getting stronger. It does help that bitcoin is of a limited quantity and therefore will stay at a stable value as the time passes. The scarcity is more than likely to increase its market cap as time passes.
When Tesla bought bitcoin, the main motive was to encourage crypto transactions for services like purchasing cars. Musk tweeted that Tesla would be accepting cryptocurrency as a valid means of payment for Tesla cars. This would have helped in making BTC more mainstream for regular transactions and coming directly in competition to fiat currency.
Post the tweet about accepting crypto payments, the price reached US$58,000. This rise was seen after the announcement in March 2023 so it very well can be tied to Musk’s announcement. However, Musk soon took this provision back by citing the reason that the mining process is extremely costly.
Price Volatility and Musk’s Influence
After Musk tweeted that Tesla would no longer be accepting crypto payments due to mining issues, the price of bitcoin fell quite hard. After the high of US$58,000, the drop was seen to be at US$30,000. One can clearly see how much Musk’s decision impacted the market.
The reason behind Tesla’s withdrawal owes itself to the cost factors as well as to the environmental impact that mining usually has. The equipment runs for days on end and eats up a lot of energy. It would not be wise for any company to advocate it in any form so it was a strategic decision on his part.
However, the tweeting does not end here. The price volatility anyways is difficult for many investors but it goes a step further in thai tale. After refusing BTC payments, Tesla eventually tweeted in June 2023 that it would be accepting the payments again. However, this good news came with a critical condition.
The condition was that the miners should use at least 50% of clean energy resources. Clean energy is far better and easier to harvest and poses less risks for the environment. This condition was fair enough for investors and for the market because the price of bitcoin rose again. This time it went to $40,000.
We can safely say that the price volatility of different cryptocurrencies is dependent on major investors. Influencers and entrepreneurs like Musk can sway the market with just a few words and make profits worth millions of dollars. But how good is it for the ordinary individual looking to invest?
Investment comes with its own set of risks which one researches about well in advance. The issue with influencers like Musk is that they are entrepreneurs so everything comes down to business. Experts recommend looking at things from an objective point of view before investing on the basis of a series of viral tweets. It might just be a meme he shared but if investors blindly follow his lead, they can face serious losses.
Any famous portfolio manager has a different point of view of the entire situation. But Musk is only looking for his own profit. Manipulating the market becomes easy when most investors, big or small, are looking into what they are saying. Being vigilant about the market trends and trusting your own analysis is essential.
We can safely say that the influence of Elon Musk’s tweets in the crypto world has been great. It has led to many people buying into cryptocurrencies they would not have otherwise. The volatility of bitcoin could even be directly related to the institutional investment of Tesla in 2023. Their decision to use it as a means of making regular transactions also influenced the market cap significantly.