How Elon Musk is influencing the crypto market

Since the rise of the cryptocurrency market in March 2020, many well-known investors and entrepreneurs have entered this new technology segment.

People often wait for confirmation to jump into something. This inevitably leaves them behind, which gives early adopters a clear advantage.

When it comes to cryptocurrencies, early adopters who bought before the mainstream are the sure winners. Elon Musk is one of the crypto influencers who can move the market both ways. He raised prices through his tweets and did the same thing to crash things with no real logic behind his decisions. This is how Elon Musk influenced the crypto market. Why is he doing this and are Elon’s tweets still influential in the crypto space?

How Elon Musk influences the crypto market – Elon Musk drives the crypto market

When Elon Musk started his crypto journey, the crypto market was on an uptrend. It did when prices got very cheap after the COVID-19 event crashed markets around the world. From the stock market to cryptocurrencies, everything began to bounce back after panic sellers cut it off.

Elon Musk noticed Bitcoin when the price began to rise, right in the middle of Bullrun 2020. He first started with a few tweets and then placed the Bitcoin symbol on his Twitter bio. This will happen at the end of January 2021.

After this sudden approval, people started buying uncontrollably. They even forget all the technical and fundamental aspects that come with investing. Beginners invest in Elon’s tweets. This is certainly something of fear and alarm, as any sudden market correction can instantly crash the price – just like it did in 2018.

The entire crypto market rose after Elon’s approval. The mainstream media has highlighted such events and is sometimes responsible for spreading misinformation. Instead of talking about the technology behind crypto and blockchain, they started to emphasize that high cryptocurrencies are generating double-digit performance in such a short amount of time.

Excessive hype and profits have resulted in people thinking differently about digital currencies. For them, the real value of Bitcoin is the investment, not the storage or accumulation of technology. That’s sad.

This is how Elon Musk influenced the crypto market – Elon Musk is ENDING its crypto support

In a surprising tweet, Elon decided to give up its Bitcoin stance after the famous electric car maker Tesla stopped accepting payments in Bitcoin. In essence, he stated that Bitcoin is not environmentally friendly. This news alone caused the crypto market to crash and lose more than 80% of its value within a few weeks. It’s funny to hear that Elon has changed his stance, even though nothing has fundamentally changed with Bitcoin.

So what’s the real reason for Musk’s choices? Out of greed for profit or to attract media attention?

In all honesty, it can be a bit of either. When the popular SNL show aired, people could clearly see Elon performing as an attention grabbing nerd who wanted to look “cool and nerdy”. The show, on the other hand, was a total failure as the crypto market (and especially Dogecoin, Elon’s favorite “crash”), day traders predicted the big day and liquidated everything as soon as the program starts.

On the flip side, one cannot help but assume that this whole act was carefully designed to buy low and sell high once one started to buy BTC from Elon until he got part of it in that number sold. The Tesla Company had to disclose its Bitcoin holdings as it is a public company. But for Elon Musk, he can simply buy and sell anonymously or through others without revealing his activities.

Will the crypto market recover?

Bitcoin is down more than 30% in May and almost 50% early last week from its last high in April, but its value is still 300% higher than last year. A decrease in this size could be a small spike in an asset with great potential, such as Bitcoin itself.

Elon Musk’s stance on Bitcoin’s environmental impact really does seem to play a role in influencing investor sentiment. However, this is not the only reason the market has declined. Just like his tweets, many other factors only act as a catalyst to boost investor sentiment.

High volatility is not a new phenomenon; it is an innate characteristic of this new asset class. The volatility is causing the value of cryptocurrencies to increase dramatically.

However, it seems unwise to attribute the rise and fall of global wealth to just one person’s actions. Cryptocurrencies are not owned or controlled by any single person / organization. It’s a community in itself.

When investing or trading, never listen to anyone, even if they are celebrities or entrepreneurs. Anyone can make mistakes and no one comforts you when you lose. Because of this, it is important that you do your own research, learn to draw and analyze the markets, and make informed decisions. If you rely solely on your trades and someone’s funny tweets, you will get nowhere. The future crypto market should stop being manipulated by tweets and get solid.

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Important NOTE: All content on the website is for informational purposes only and does not constitute investment advice. Your money, the choice is yours.