Elon Musk is one of the most influential people in crypto, but it wasn’t always the case. A little over a year ago, the world’s richest man with a $70 billion fortune didn’t tweet about Bitcoin and didn’t trigger huge market swings.
During his lifetime, Elon has been an engineer and entrepreneur, co-founded PayPal, SpaceX, and has become the CEO of Tesla. Technically, any technology that he has taken on has reached great success — and recently, Musk got involved in crypto.
After Elon added Bitcoin to his bio on Twitter, his influence hit the crypto market. The businessman can raise Bitcoin by 20% and meme tokens by several Xs with one single tweet. However, he remains a controversial figure and has opponents in the crypto space. Let’s see how and why Elon Musk has such an impact on cryptocurrency.
One single word making billions
A starting point in Elon’s crypto saga was on 29 January 2021, when the businessman wrote #bitcoin in his Twitter bio and this helped Bitcoin surge by almost 20%. There had already been rumors that Musk was going to invest in crypto, but it remained a secret when that would happen.
Following the Twitter bio update, Elon tweeted: “In retrospect, it was inevitable” — and still it is now known what exactly Musk was intended to say. However, the businessman’s first prominent move in crypto wasn’t received positively by everyone: many influencers were concerned by Elon’s open support for Bitcoin as they considered it as market manipulation. They believed Musk was using his social media resources to pump BTC that he had previously bought.
Obviously, these claims didn’t reduce Elon’s enthusiasm. A few days later, he appeared in Clubhouse where he confirmed his views on Bitcoin. The entrepreneur added that he believes BTC is “on the verge of broad acceptance by conventional finance people”.
Tesla invests in Bitcoin — and dumps it
The rumors confirmed: along with the SEC annual report in February 2021, Tesla announced having bought $1.5 billion worth of Bitcoin. The company also declared it was going to start accepting the asset as payment. This news provoked another rise in the BTC price and explained Elon’s pro-Bitcoin tweets last month.
However, the party didn’t last long: in May, Tesla suspended BTC as a payment method, which led many to think Elon’s position on crypto was just a farce. The company explained though that it’s concerned with Bitcoin’s environmental impact and won’t start accepting the currency again until its mining goes much greener; the BTC price plunged. However, Tesla reassured that the company wouldn’t sell any of its holdings in Bitcoin.
It didn’t take long to disprove this statement, though: one month later, Elon Musk said in a tweet that Tesla sold 10% of its Bitcoin, which, however, he explained to be an attempt to show the company can sell the coin without affecting its market price.
Elon Musk’s dogs
In January 2021, the SatoshiStreetBets subreddit started aggressively shilling Dogecoin with the goal to make the asset cost $1. Elon Musk was one of those who supported the movement.
It was another one of his historical tweets where he posted a picture with a dog on a “Dogue” magazine cover. Same as with Bitcoin, it sparked rumors that the billionaire had holdings in DOGE. Before this fact was revealed later, Elon’s tweets brought the coin into the Top 10 cryptocurrencies by market cap.
What SatoshiStreetBets did was actually open Pandora’s box of Elon’s tweets dedicated to Doge. He called it “the people’s crypto”, encouraged to “Release the Doge!”, and tweeted a “doge” song. However, he wouldn’t be Elon if he hadn’t also said once that Dogecoin was “a hustle” on Saturday Night Live, provoking a massive drop in the asset’s price.
The interest in Doge that the billionaire sparked has gone far beyond Dogecoin — it has helped emerge the whole giant Doge-like meme token market where every asset is trying to beat another in market cap. Some of these tokens follow Elon’s tweets: after the businessman got a Shiba Inu puppy and tweeted “Floki has arrived”, Floki Inu coin exploded. The largest asset of the dog token family, the controversial Shiba Inu coin, has even beaten Dogecoin in terms of market cap for several days.
Elon once explained why he promotes Dogecoin and not other cryptocurrencies:
Musk was for several months very active in promoting Dogecoin development. The main goal was as follows: if DOGE “speeds up block time 10X, increases block size 10X & drops fee 100X”, the network would “win hands down.” However, this approach was criticized by the community with Vitalik Buterin explaining why such simplicity is illusory.
Elon Musk’s tweets and the following market swings: numbers
Cryptocurrency was created decentralized, meaning there shouldn’t have been a single party that could affect it much. Elon Musk is living proof that demonstrates though: Bitcoin price can be altered with one single tweet. Let’s look at some examples:
- Elon writes “#bitcoin” in his Twitter bio, BTC rises by 20%.
- Elon tweets Tesla is no longer to accept Bitcoin as payment, BTC drops by 15%. Later, Musk writes the company will resume accepting Bitcoin after mining becomes greener, BTC rises by 10%.
- Elon says he’s happy with what the North American miners told him about their plans to use more sustainable energy in mining. BTC grows by 4%.
- Elon tweets “Doge”, “Dogecoin is the people’s crypto,” and “I am become meme, Destroyer of shorts.” DOGE surges by 60%.
Something even Elon Musk couldn’t avoid
We brought some examples of how Elon Musk can affect the crypto market with just a few tweets — however, sometimes such an influence can turn out to be an Achilles heel, and not for the account owner, but for his followers. In summer 2020, Elon Musk became the first celebrity in a massive breach followed by a fake giveaway. Accounts of Bill Gates, Joe Biden, Kanye West, Donald Trump, and many others were hacked and announced they would multiply their followers’ wealth.
This scheme known as a Bitcoin doubler is said to have brought hackers over $2 million in October 2020 when they reached Musk’s account. What happened was that scammers posted on his Twitter that he was “feeling grateful” and would double any sum of money sent to his wallet address. Needless to say that this was never to happen, but many victims felt happy to send their money to someone they don’t know in the pursuit of profit.
Interestingly, the scam had taken place a few months before Musk engaged in crypto — and no one knows how many of his followers would lose money if the attack were to happen later, after the billionaire became popular among crypto enthusiasts.
Still, this was not the first incident — there was another one back in 2018 when the hackers created a fake Twitter profile with impersonated Elon Musk and promised his followers a 3000 ETH giveaway. The rules were simple: you send 0.5–4 ETH to an address provided and get back 5–40 ETH. Again, the transferred funds have never seen their owners again.
When a trusted person on Twitter posts that they would double your wealth, it may be hard to resist the temptation and send them some of your money. However, there is a simple rule of thumb: never take part in giveaways that ask you for your money first. And we are sure that another safety rule not to ever send funds to unknown people is something you strictly follow.
The pros and cons of Elon Musk’s passion
Elon Musk is a person with a huge influence on crypto. He accounts for the growing popularity of Bitcoin, has provoked the BTC price surge, and has even been the reason for the emergence of the whole dog meme token family.
Is there something wrong with such influence, though? It definitely has its downsides — Elon is a human and quite an eccentric one, so his opinion can change unpredictably dragging the whole crypto market behind. We owe him the world’s growing awareness of crypto, but sometimes his tweets cause little panic, and people lose thousands of dollars.
Musk started to actively tweet about Bitcoin and other cryptocurrencies soon after he had invested significant sums in digital assets. Many may suppose this is a part of a cunning plan, whereas others will keep thinking that it’s nothing more than the billionaire’s pure enthusiasm. One thing is obvious in this regard — Elon Musk undeniably enjoys what he is doing and is most likely to continue this path.