The Elon Musk Effect on Crypto
By Roman Davidson August 14, 2023
- Elon Musk's influence on the cryptocurrency market has been substantial
- Twitter's transformation to X impacted the world of cryptocurrency, especially dogecoin
- Historically, Musk's interactions with dogecoin, shiba inu and bitcoin have directly affected the markets
- Fake tokens have falsely claimed affiliations with X and Twitter, but Musk has since dispelled these rumors
Elon Musk's influence on the cryptocurrency market has been substantial. In the turbulent cryptocurrency market, Musk's tweets stand as pivotal moments, causing substantial market shifts. Twitter's rebranding to "X" has notably affected the cryptocurrency market, especially Dogecoin's "DOGE," raising its price by 2% within hours. Even though Musk confirmed that X will not launch any crypto tokens, addressing concerns over scam coins like X, TwitterDAO and many others, the tech magnate is deeply invested in the crypto narrative.
Elon Musk's conversion of Twitter into X has boosted dogecoin's position and market cap, as the meme cryptocurrency has since ascended to the seventh position in market capitalization. In the week of the announcement, DOGE registered a 13.58% rise in value.
Dogecoin was introduced in 2013 as a meme joke and was never intended to be taken seriously. Still, despite its humorous origins, the cryptocurrency soon attracted a dedicated following, causing its value to fluctuate over time.
As alternative cryptocurrencies flooded the market, Dogecoin developed a particularly strong community presence on platforms like Reddit. By January 2018, during a peak in the cryptocurrency market, dogecoin's value skyrocketed, pushing the market capitalization to an astonishing $2 billion.
Musk's public endorsements of Dogecoin, primarily through his tweets, have notably impacted the cryptocurrency's value. A prime example is a December 20, 2020 tweet from Musk with just one word: "Doge," which led to a remarkable price jump for dogecoin.
Musk's consistent tweets about Dogecoin have made notable impacts on market dynamics. A tweet on May 11, 2021, advised the public that Tesla would potentially accept dogecoin as payment, sending ripples through the market. Another comment during Musk's appearance on Saturday Night Live in the same month led to a considerable price drop.
However, Musk's engagement with Dogecoin has not been without controversy. Critics argue that he uses his platform to unduly influence the value of this coin.
Shiba Inu (SHIB)
Elon Musk also frequently shares his thoughts about the Shiba Inu coin, shiba inu. His tweets have historically led to substantial surges in SHIB's market value.
In a somewhat playful and perplexing recent tweet Musk quipped that his company had momentarily rebranded with the imagery of the Shiba Inu dog. He later clarified that he was referencing the actual canine breed and not the crypto asset.
It is an established fact that Musk has a pronounced affinity for cryptocurrencies, with dogecoin as a prominent favorite. However, the entrepreneur claims that he does not possess any holdings in shiba inu tokens. Addressing a direct query from an eager shiba inu investor on Twitter, Musk plainly responded with "none," implying that he has no stake in the coin. This revelation came about when the cryptocurrency was on the verge of reaching its highest value in October 2021.
Elon Musk's tweets regarding bitcoin have also influenced this cryptocurrency's market dynamics over the years.
Rewinding to November 2017, Musk addressed speculation that he was actually Satoshi Nakamoto, clarifying through a tweet that he was not, in fact, Bitcoin's enigmatic founder. He stated that his personal bitcoin stash was a modest 0.25 BTC, generously gifted by a close friend. In 2019, during a podcast appearance, Musk lauded Bitcoin for a "brilliant" structure but simultaneously flagged the associated high energy consumption as problematic.
March 2021 witnessed a paradigm shift in Musk's stance on Bitcoin. Through a tweet, he conveyed that Tesla would now welcome bitcoin as payment , with a plan to retain any bitcoin accrued rather than convert it back to fiat money. However, by May 2021, in another tweet , Musk reversed this decision. As he stated, he was concerned about Bitcoin's environmental impact. The tweet triggered a sharp drop in bitcoin's market price.
Elon Musk's strategic move to transform Twitter into X has catalyzed an influx of X-themed tokens on decentralized exchanges (DEX). The rebranding has become a muse for many X tokens emerging on various blockchains. Some showcase ambitious roadmaps for the future, while others are stark reminders of classic pump-and-dump schemes . One token's staggering 1,200% surge within a day was especially surprising, especially as the associated project terminated operations earlier this year.
The timing of these token launches undeniably mirrors Musk's influential tweets. For example, the emblem for " AI-X " eerily resembles Musk's "SpaceX," and it subsequently witnessed meteoric ten-fold growth. Similarly, "Deus X" surged by an astounding 2,600%.
A plausible reason for this token mania could be the prevalent low volatility periods that heavyweight currencies bitcoin and ether are currently experiencing. With reduced volatility in major cryptocurrencies, traders hungry for amplified returns are veering towards meme coins and low caps. Despite the inherent risks, the allure of these assets lies in the potential to deliver robust short-term gains, making them appealing even when the broader market sentiment is bearish.
Meanwhile, Elon Musk recently clarified that he has no intention of introducing X-branded crypto tokens, eliminating rumors and speculation.
In the End
Musk's influence on the cryptocurrency market has been notable. His rebranding of Twitter and subsequent tweets have substantially impacted various cryptocurrencies, including dogecoin. Musk's tweets have also influenced the value of shiba inu, although he confirmed that he does not own any Shiba Inu tokens.
Meanwhile, his interactions with bitcoin over the years have been impacting its market price. Following the recent Twitter rebranding, various seemingly X-related tokens have emerged, some of which have experienced extraordinary growth. However, Musk recently clarified that no X-branded cryptocurrency tokens would be launched, providing clarity amidst rampant speculation.