⚡️Elon Musk has gained a lot of popularity over the years of running Tesla and SpaceX.
His name has been highlighted even more during the last 12 months when TSLA stock price grew 5-fold and made Elon the wealthiest person in the world. As a result, not only did Elon surpass everyone in terms of wealth, but also he amassed more than 55 million followers on Twitter.
Similarly to as it has been in the past with Donald Trump and Mexican peso prices, Elon Musk's publicly stated views seem to have had an effect on the cryptocurrency prices.
Up until 2021, Elon was pretty resistant towards the crypto markets. Back in 2019, Elon shared in an interview with Cathie Wood that “Bitcoin structure is quite brilliant, but I'm not sure that it would be a good use of Tesla’s resources to get involved in crypto”.
However, tables turned at the end of January 2021 when news spread about Tesla converting $1.5 billion into Bitcoin and when Elon tweeted the following:
Starting from this moment, Bitcoin price rose from around $32 000 up to $57 000 per coin over a time period of only 20 days.
Soon after, on March 24, when Bitcoin's price had dipped to $50 000 mark from the previous all-time high of $61 000, Elon announced that Tesla will accept BTC for vehicle purchases. In just one day after the tweet, Bitcoin's price rose by around $5 000, and by another $4 000 in the few following days.
From there, Bitcoin price went up to the $63 000 mark in mid-April, and was later roller coasting in between $50 000 and $60 000. Fast forward to May 13 – Elon announced in a tweet that Tesla is suspending vehicle purchases with Bitcoin:
Within less than a week after the tweet, the price of Bitcoin crashed by around $10 000, from $49 000 to $39 000 per coin. According to CNBC, the market capitalization of the entire crypto market fell by $365 billion soon after this tweet. The sharp fall can also be seen in the global crypto market cap.
The price of Bitcoin continued to drop after another Elon's tweet that hints Tesla has already or may be dumping Bitcoin holdings.
Fortunately, Elon calmed the investors one day later by tweeting that Tesla continues to hold Bitcoin on its balance sheet.
Elon has also touched Dogecoin several times in his tweets. For example, this tweet in late December 2020:
According to scientific research on this topic, Dogecoin's price, number of trades, purchase volume and returns skyrocketed in minutes after the mentioned tweet.
Since then, Elon Musk has repeatedly tweeted about Dogecoin, and its price has grown more than a hundred times in 2021 alone, from around $0,005 up to more than $0,60 at its peak. What was once a joke in the crypto community, turned into a massive profit opportunity.
Elon Musk is certainly not the only factor affecting cryptocurrency prices, however, there seems to be an apparent correlation in numerous cases.
One thing is for sure – Bitcoin and other cryptocurrencies were volatile also before the CEO of Tesla got involved, hence this might only be one of the many storms in the long-term development of cryptocurrencies and blockchain technology.
🙌 Happy trading,
Your NAGA team
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