Why should we care about Elon Musk’s comments on cryptocurrency? This is the new modern reality. Musk is one of the most significant global social media influencers. Unlike many other public persons, he runs his account on Twitter personally, attracting additional attention to his famous name. Musk uses Twitter to launch new products, exchange ideas, and make jokes. The collections of his most famous twits travel around the Internet, and some of them are more than serious. For example, with one tweet, Musk offered to solve the energy crisis in Australia. The next move was the contract with the Australian government.
Surprisingly or not, many people want to know Musk’s opinion on cryptocurrencies. Cryptomarket is very sensitive to various rumors and opinions, especially when it goes from a famous billionaire. The decision of the Tesla company, in which Musk takes the CEO position, to buy $1.5 billion in Bitcoin tokens pushed Bitcoin rates to new highs. Musk’s tweets on crypto Dogecoin helped this item to reach a new record price level. At last, Musk mentioned he would not mind launching his own cryptocurrency. Let us try to predict what will happen if ElonCoin comes true.
Elon Musk Thoughts about Cryptoсurrency
As it is mentioned above, Elon Musk is a great cryptocurrency supporter. His sympathy can be partially explained by his previous experience with electronic payment systems. At the end of the 1990s, Musk launched the electronic payment service company X.com. After the merge with Confinity bank, Musk focused on its mail payment system, PayPal. Yes, it was Elon Musk who made PayPal one of the most popular online payment services in the world.
At the beginning of PayPal, Musk faced criticism from his colleagues, the Confinity board, and other decision-makers. However, he followed his own ideas and finally won. So, seeing Musk among crypto supporters is just the next step for him, but not an entirely new idea.
In 2018 Musk’s tweet about Bitcoin had been published. At that time, it was not an idea but spam. The account was hacked. In 2021 Elon Musk returned to the theme of Bitcoin, published several original tweets and replies related to cryptocurrency. This time he acts by himself and supports his tweets with a verbal confirmation, and with Tesla's deal on $1.5 billion with Bitcoin. Thus, it can be concluded that Elon Musk really supports the idea of digital currencies and his support is a serious argument in support of cryptocurrencies.
Measuring the Musk Effect on Cryptocurrency
To understand the impact of Elon Musk on the cryptocurrency market, it is necessary to review all factors of influence. The price of the major investment assets — fiat currencies, stocks, derivatives — depends on the fundamental economic factors. It includes the pace of economic growth, monetary policy, major political and economic events, etc. For commodities, the price is also affected by the demand-proposition balance: thus, the oil production cut usually pushes the oil price up. For the shares, the corporate performance reports are the essential factor.
The cryptocurrency market feels only a weak impact of the fundamental economic factors. That is why it always overreacts to various messages from the market influencers. Before Musk joined the crypto community, the market trembled with other names — one of them is Vitalik Buterin, one of the Ethereum co-founders. Now Elon Musk is probably the most famous name on the market, so the crypto traders call the consequences of his remarks the “Musk Effect.”
In January 2021, Elon Musk changed his bio on Twitter to the word #bitcoin. As a result, the price of Bitcoin rose by 18.99%. It can be said that Musk supported the new wave of cryptocurrencies: Bitcoin jumped from $32,000 to 38,000, its market capitalization increased to $111 billion, and all this due to one change in Twitter. One picture about Doge on January 28 pushed its price four times up — for a limited time. Each Elon Musk tweet influences the market, and somebody should make good money on it. Only one vogue tweet about his own coin — and you are reading this article.
Why Musk’s Decision Is a Bad Thing
Elon Musk is known as a risk-taker, so he does not feel afraid of bad decisions. For example, he called his SpaceX company to be the dumbest way to earn money. The problem is that he is not only a billionaire CEO but also an influencer. Musk’s opinion on crypto, including tweets, can motivate people to follow him, and there are certain related risks.
Thus, the current cryptocurrency market peak is grounded on the pandemic-backed economic slowdown. However, Musk contributed to support it. Now via his Tesla, he is an owner of $1.5 billion Bitcoin, so he is interested in keeping its rate high. When the influencer purchases a significant share of some asset, special regulatory bodies investigate this case on the regulated market. However, the poor regulation of the crypto market leaves Musk relatively safe.
Elon Musk Favorite Cryptocurrency List
Elon Musk’s favorite cryptocurrency list is not as great because, in early 2021, we count only 6 of his tweets about crypto. So, we can name Bitcoin, Dogecoin, and Ethereum — without mentioning his potential own currency ElonCoin.
Of course, Musk loves Bitcoin, he tweets about it, and his company buys it. His sympathy to Dogecoin is not as clear: this meme-based item started as a joke, and Musk could support it as a piece of humor but not an investment tool.
Should Investors Buy and Sell Bitcoin on Musk’s Tweets?
We cannot provide ultimate advice on when to buy or sell Bitcoins. However, a crypto market is sensitive to Musk’s tweets because thousands of investors start buying and selling Bitcoins after it. Each investor, who wants to use these market waves, can follow the market or play against it.
What cryptocurrency does Elon Musk like?
According to his tweets, Elon Musk’s favorite Cryptocurrency is Dogecoin. This crypto unit started as a joke, but after Musk’s tweet, it recorded a new peak price, and market whales discuss it as a people coin and even a future universal internet coin.
Also, after Tesla purchased $1.5 billion Bitcoins, it is evident that Musk likes Bitcoin — he is one of the founders and CEO of Tesla.
At last, if the extravagant billionaire keeps his promise, he should like Elon Musk’s Cryptocurrency.
Can I buy a Tesla with Bitcoin?
Despite Musk’s tweet from March 24, 2021, Tesla does not sell its vehicles for Bitcoin. Tesla’s CEO tweeted that now you can buy Tesla with Bitcoin; however, the company is not ready to accept and manage the payments in crypto. You can pay by Bitcoin for a new car preorder — an equivalent of $100. For the car price, Musk declares Tesla should run its own internal software. There is no information about when Tesla plans to launch it or even an official confirmation from the Tesla board.