How does Elon Musk affect crypto space?

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Elon Musk is the only person who has collected sufficient power to impact markets with a single tweet. Anyone who is even slightly familiar with bitcoin has heard of Elon Musk. With over 55 million followers on Twitter, Elon Musk, CEO of Tesla, SpaceX, and The Boring Company, appears to be shaking up the cryptocurrency industry with his clever tweets.

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He has had a complicated connection with cryptocurrency. Once, he used to adore them, then praised them, and now he believes they’re bad for the environment. This sort of roller coaster behavior, seen in Musk’s character, has also been seen in the cryptocurrency market.

The recent downfall that bitcoin has experienced was also the aftermath of a tweet. You must be wondering what tweet it was and how powerful he is to just drive the whole market at it’s tweet. Well, this article will put light on all the influential tweets. However, if you are yet not in the game but are planning to invest in the crypto market then, buy bitcoins in Canada now and get the money rolling.

 

The Crypto Market Being Driven by Elon Musk’s Tweets:

Let’s take a look at Elon Musk’s tweets that have had a great influence on the crypto market and see how the Elon effect worked throughout:

Elon initially discussed bitcoin back in 2014; he tweets adoring bitcoin, describing it as “probably a positive thing.”

Later, Elon’s skepticism about cryptocurrencies improved by 2019 as he embarked on a more severe crypto adventure. He began to think about its technology and utility as a possible part of his business strategies. As a result, Tesla decided to put $1.5 billion of its cash on the table in February to invest in Bitcoin. As soon as this new break, Bitcoin’s price increased by over $3,000 in minutes and later by 20% in 24 hours.

Tesla traded 10% of its Bitcoin holdings in April, prompting investor concern. Elon reacted with a tweet, claiming that Tesla sold Bitcoin to test its stability and that he still owns his Bitcoin investment

As the news spread wide like a fire, many investor’s hearts shattered, and their continuous comments on this account made Elon Musk change his mind. Elon Musk soon appeared to doubt the asset’s environmental effects. The news that Tesla opted to accept Bitcoin for payments on its electric automobiles was still undergoing a process; Musk changed his mind right after a month.

Elon Musk came to the conclusion that Tesla will no longer accept Bitcoin payments. Tesla’s support for Bitcoin vehicle sales was halted due to the company’s worries about the “rapidly expanding consumption of fossil fuels for Bitcoin mining and transactions, particularly coal.” However, this was nothing new to be known but since Elon tweeted about it, many companies took advantage of it and started discussions on it, probably to accelerate their businesses.

This Musk’s remark had its most recent consequences on May 19. Just because of one tweet, the whole crypto industry lost roughly $1 trillion at one time. On Wednesday, Bitcoin, the world’s largest and most popular cryptocurrency, fell to a three-month low of $30,066 at one point, down more than 50% from its April peak of $64,895. Ethereum fell about 57% to $1,850, its lowest point since late January.

Alex Wilson, the co-founder of The Giving Block, stated what he feels about the whole Elon effect, “Bitcoin has been through much worse. Long term, I don’t think it will have a major impact. Short term, I think it hurts investor confidence because it shows how much impact one person can have on short-term price movements. It would be a whole different debate, though, if Elon’s tweets were really the only thing driving the price movements.”

Musk’s statements and their consequences may have harmed cryptocurrency in the eyes of some institutional investors. While many investors already don’t take Musk seriously and don’t base their investing decisions on his views, it raises questions about the stability of the cryptocurrency market when a single mistaken tweet can wipe out hundreds of billions of dollars in the market, in just a matter of days.

This decision of Musk threw cryptocurrencies into a tailspin, with Bitcoin plummeting to roughly $30,000 as a result.  However, when he was asked about his views on crypto later, he said, “The ultimate war is between fiat and crypto. On balance, I prefer the latter”.

He didn’t stop here; he continued to play with cryptocurrency in the last week of May. He turned to Twitter to express his willingness to assist miners in making their operations more environmentally friendly. Following the tweets, Bitcoin soared 19 percent to $39,944, after falling to over $30,000 earlier. Not only Bitcoin, Ethereum also recovered some of their losses later in the day on Wednesday, all hail to a Musk tweet with barely any sensible talk, or probably just a few emojis, that’s what it takes to distress the whole market. This is the power of the Elon Musk effect.

 

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