It doesn’t take much for Elon Musk to move cryptocurrency prices. Sometimes a photo of a dog is enough. So after he posted a picture of his new dog Floki, a Shiba Inu, on Twitter this Monday, the crypto market exploded. “Floki has arrived,” he said to the network community. He also ensured that the prices of mini coins Floki Inu (plus 19 percent), Floki Shiba (plus 143 percent), and Super Floki (plus 132 percent) increased massively in one day.
It isn’t the first time Musk’s tweeting outpouring has gotten crypto prices moving. When Musk tweets, the crypto scene jumps on. He doesn’t have to provide in-depth analyses for this, and nobody wants to know anything about the background to his opinions. He is a leader in the crypto trading world.
Almost 60 million users follow the Tesla boss on Twitter, A fact published by The News Spy. A few letters or a photo on Twitter are enough, and small investors stylize him as an excellent yield oracle. His contributions cause prices to spike and plummet. And because Musk followers and crypto fans now know this, the effect is amplified.
Twitter is Musk’s mouthpiece.
In Musk’s world, adding the hashtag #Bitcoin to a Twitter bio is enough to boost the price—as happened in January 2021. In early June, bitcoin’s value plummeted five percent after Musk tweeted a broken heart emoji and the hashtag #Bitcoin. Memes are small snippets of images, sounds, or videos that users incorporate into posts on social networks.
He announced that the plan was promising. As a result, the Dogecoin course was increased by almost 52 cents. Musk ponders cryptocurrencies not only on Twitter but also on US television. When he guested on the comedy show Saturday Night Life in May, he brought his mother in front of the camera – who then joked that please doesn’t get any Dogecoins for Mother’s Day.
The Tesla boss later explained the fun currency as the “future of currency” before jokingly calling it “Hustle.” But, of course, the word has several meanings. It doesn’t necessarily have to be meant negatively, but it can also be translated as a rip-off. And of course, the Dogecoin’s price pranced along with his statements.
And in mid-June, the value of bitcoin rose by almost 10 percent to over $40,000 after the Tesla boss announced that he might soon allow payments with the cryptocurrency again at his car company. According to Musk, the prerequisite is that Bitcoin improves its shabby image and that half of all new coins will be mined with clean energy in the future.
When Musk withdrew Bitcoin’s status as a means of payment in mid-May, the price plummeted. The head of the e-car manufacturer was allegedly suddenly surprised that mining – i.e., the production of new bitcoins – consumes as much energy as small industrialized countries. It was a bitter loss of importance for cryptocurrencies.
The markets also reacted to his tweets in the gambling war between small investors and hedge funds over Gamestop shares at the beginning of the year. Within minutes, the course rose by 30 percent after he wrote “Gamestonk!” in a post and shared the link to the online forum Wallstreetbets. There, private investors exchange ideas about investments – such as in Gamestop. Musk tweets, and investors follow him.
According to market analyst Timo Emden, it is less due to Musk’s financial expertise than his image as a trend expert. “Elon Musk is considered innovative, as someone who recognizes the major future trends.” As a result, many investors who believe in his forecasts stuck money into his touted assets. With the market impact Musk has already demonstrated, Emden can understand that.
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But: Taking Musk’s often cryptic tweets as the only basis for investment is not a good idea. After all, you never know if a tweet wasn’t just intended as a joke. “Sometimes no one knows what Musk means,” Emden said.
The US entrepreneur’s Twitter behavior enrages the US financial controllers and provokes critics. The managing director of the financial services provider, Magda Wierzcyka, accused Musk of market manipulation. She attributes the extreme fluctuations in the Bitcoin price to his activities on social networks. Some accuse him of destroying investors’ savings with his enthusiasm for opinions. Musk denies the allegations.
However, Musk has damaged his reputation in the crypto world. “Musk lost trust with his constant changes in strategy,” says Emden. And yet his Twitter account will continue to be required reading for every crypto investor.
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