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The Elon Musk Effect on Cryptocurrency Markets : Coin Gabbar

22 Dec 2021 By : Sourabh Agrawal
Southeast Asia’s Lar

Who is Elon Musk

Elon Musk is a first-generation entrepreneur, whose name is now synonymous with Technology due to his ventures like Tesla and SpaceX. Musk is the CEO of Tesla and is the revolutionary company's billionaire founder orbits space and other planets. That is why he has a huge fan following across the globe, especially in the field of technology and innovation. With each move, he makes a desirable impact on people's lives around the world. People look up to him as an icon bringing the latest in technology to the access of the public.

What exactly happened

One fine day in February 2021, he tweeted about the purchase he had made in Bitcoins which was valued at $1.5 billion. This news skyrocketed, creating a buzz on social media platforms which was also the hot topic for the day. Reacting to his move, people began to purchase and hoard Bitcoin, which eventually inflated its price, creating a massive uproar.

Somewhere in the month of March 2021, Mr Elon Musk tweeted that he has got a Shiba Inu (which serves as a type of cryptocurrency). He again tweeted in June that he would likely rename ShibaInus Floki. Floki is considered to be a spinoff of Dogecoin, a variant of cryptocurrency.

But these turned out to be symbolic tweets.

It is estimated by experts and cryptocurrency analysts that the tweets of Mr. Musk are like to inflate the prices of crypto coins multi-folds. An approx estimation is that it would increase by at least 10 times. Experts opine that the type of impact Elon has across the globe is moving asset prices to a considerable extent.

On the flip side, some of the moves he made backfired and were wrongly perceived by the common masses. For example, when he put a picture of himself with a dog, depicting that the dog was Shiba Inu, and then later renamed it Floki, it was thus wrongly perceived and conceptualized by people. A calculated move on the part of Mr. Musk with all the different types of cryptocurrencies triggered a price rise by 1000 percent. Risk-taking and calculative move to make it a profitable gamble.

Moreover, Elon Musk topped it up with another action that spun-off Floki Inu with Dogecoin in October. The profit he made was a sudden spike of 30 percent. His tweet commenting on the emotional value of people said that dogecoin is the cryptocurrency of people, and this tweet saw a whopping increase of 15000 percent in one year.

Amidst all these tweets, Musk, in March 2021, announced that tesla would accept Bitcoin as a payment method, but within a few months, he backtracked from this tweet. He stated that because of the environmental concern regarding using fossil fuels for bitcoin mining and transaction, it is not so good move by the company. This led to a decline in the cost of the cryptocurrency.

Analysis

Many experts believe that the tweets made by Mr. Musk hold strong evidence on the part of the billionaire to use the cryptocurrency platform to play to his tune and as per his convenience. Also, many market experts believe that he tweaks and manipulates the entire situation using his strata and his importance in society as a tool in speculating the prices of the crypto assets.

He consistently does this to lure huge profits out of the entire situation and transaction. It is evident that Bitcoin rose in price and reached$64,000 in April 2021. This was only possible because his tweets created havoc and significant hype in the system while it again crumbled down to $50,000 in October 2021.

A series of constant lows and highs within episodes of price movement and manipulation leads to the spread of negativity and a negative return for many people who look up to Elon Musk and trust disabilities. The volatility and harsh tweets made by Elon Musk at crucial junctures made the crypto market extremely fragile, which added vulnerability.

Is Crypto price susceptible to emotions?

Now the big question arises.

Is Crypto that Susceptible to Emotions?

Can even one person have so much control over the value of crypto?

Are the small investors getting played by the rich and the powerful?

A man like Elon Musk, with the charisma and persona he has, was never expected to focus only on personal again disrupting the sentimental values of people. He is held accountable and responsible for misconduct, compromising the ethical responsibility of fair dealing with the general public.

Is this the time for the Regulators to intervene?

The cryptocurrency market is an emerging field of investment and avenues are bound to grow in the future. Expert opinion and advice from ElonMusk were always valued and regarded highly. Now, people began to read his tweets and comment with a suspicious eye, taking it with a pinch of salt.

But there are many such celebrities who have the capability to influence the sentiments and drive the value of Crypto to their desired objectives. Although such cases happen in the case of other financial instruments as well, there are regulations in place to keep a check on the same. But, there are no boundaries to Crypto and it works internationally at the same pace.

A similar kind of strategy may be adopted by the Government to control the influence of unwanted interruptions and let the market run freely according to its dynamics. However, owing to the inherent limitations due to the specific nature of the Crypto, it is very difficult to control the Crypto Market to that extent, but a good education and awareness drive will go a long way in protecting investors from such mishaps. www.coingabbar.com is a genuine platform with a research-based environment that helps its users with the right information enabling them to take wise calls.

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