Elon Musk has become a name known to any individual remotely conscious of cryptocurrency. His connection with cryptocurrencies has been a complicated one. What does Elon Musk do for entertainment between creating spaceships and hyperloop systems and riding an autonomous electric vehicle business? He jokes around with cryptocurrencies. Every moment he tweets about cryptocurrencies, the market appears to react to them. As a consequence of these tweets, CoinSwitch Kuber stated that there is usually a rise in their trade quantities. This blog will discuss Cryptocurrency and Elon Musk: What is the connection?
This is partly because he regulates two industrial powerhouses, which can select to accept cryptocurrency agreements. It is also due to his social media effect and the disproportionate impact of opinion on cryptocurrency importance. Check out how much a bitcoin miner can earn from mining.
How does he affect the Crypto Market?
It took one tweet from Musk to plunge bitcoin to below $45,000 from a rapture of $65,000. Nonetheless, he later elucidated that Tesla will not be peddling any coins. On May 13, 2021, Musk had declared openly that Tesla would no longer ratify vehicle purchases using bitcoin due to environmental interests. Tesla will not be selling any Bitcoin, and we schedule to utilize it for agreements as soon as mining transitions to more sustainable energy.” Bitcoin plummeted by around 10% shortly after the tweet.
When Musk altered his Twitter bio to #bitcoin on January 29, 2021, the significance of bitcoin climbed to nearly $38,000 from over $32,000. Musk’s tweets about dogecoin lately triggered a rally in the digital currency, which began as a social media parody. Dogecoin has risen to become the fourth-largest cryptocurrency by market cap. In April, Musk debated with people on Twitter to move to Starbase. Soon after Musk’s tweet, a cryptocurrency called Starbase Token, holding up the STAR ticker, surged around 6000%, documented CryptoPotato. In April, Tesla sold 10% of its Bitcoin ownership, causing alarm among investors. Elon reacted to this by stating that Tesla sold Bitcoin only to assess its liquidity and still clenches his Bitcoin dividend.
Soon after this, Elon Musk smashed the hearts of many investors with tweets that appeared to question the environmental effect of the asset. He sent out a tweet that said Tesla would no longer be ratifying payments in Bitcoin owing to the elevated energy consumption of Bitcoin in the mining procedure. This decision sent cryptocurrencies into a low spiral, and Bitcoin fell to almost $30,000. When confronted about his stance on crypto, his tweet said that in an actual battle between fiat & crypto, he would support the latter.
Earlier this week, he proceeded to toy with crypto. He took to Twitter to imply his support to assist miners in making their procedures greener. Following the tweets, Bitcoin leaped 19% to trade at $39,944, which had slumped to almost $30,000.
Is he the sole person to be responsible for crypto volatility?
The above account appears to paint an image that Elon can move the crypto markets with his tweets. Nonetheless, a deeper look into the working of crypto as an enterprise indicates otherwise. When the crypto market picked up towards the end of 2020, it went through the proliferation phase, where many investors infiltrated the market. Towards mid-February 2021, the currency marked up and finalized at an all-time high of $60,000. The dispersion phase began when the RSI indicator indicated that the asset was overbought, slowly accelerating a markdown.
The meltdown in the outbreak of cryptocurrencies has taken a toll on investor sentiments. Still, the fall was not immediate because Elon is tweeting a bunch about it. Soon after the hugest cryptocurrency hit its all-time high of $63,729, it hit a crucial dip in its importance on 25th April before it recovered slightly.
Elon Musk took a U-turn regarding his impression on Bitcoin later on 12th May, implying that it was not the first downtrend in its importance. Many specialized analysts understand that Bitcoin was overbought at that point and required a trigger to fall and rectify itself. Elon Musk’s tweet just behaved as a catalyst for the much-anticipated revision in the crypto market.