Elon Musk, the Tesla and SpaceX CEO, owner of the X social media platform, has become one of the biggest influencers when it comes to technology and finance, thanks to his public statements and/or tweets.
His social media posts have had a particularly striking effect on the world of cryptocurrencies, in particular meme coins (BTC, DOGE, MAGA), as well as the stock market, meme-based and speculative stocks in particular.
Musk, SNL, and Dogecoin
Perhaps, the most famous example of Musk’s impact on the cryptocurrency market is Dogecoin (DOGE). It was originally created as a joke on Bitcoin in 2013 but had little practical value. Nor did it have a reputation as a serious investment tool until Musk started taking a public interest in it. He began tweeting about in 2018-2019, loving the fact that this coin was inspired by a meme (Kabosu Shiba Inu dog which passed away at the end of May).
Starting in 2021, the tech billionaire began to frequently publish tweets about Dogecoin, talking about it playfully and calling it “the people’s crypto.” Once Musk referred to himself as “The Dogefather.” These tweets, even though humours, had an enormous effect on the market and the DOGE price in particular. Whenever Musk mentioned this coin or made even a passing reference, the DOGE price would surge in a matter of minutes – thus was the huge power of his public comments on it.
In April 2021, Musk tweeted “Doge barking at the moon” along with an image which played on the popular crypto meme “to the moon” – this phrase suggests that a coin’s price would skyrocket. After the tweet was published, the DOGE price soared within just minutes. On May 8, Musk debuted on Saturday Night Live (SNL), where he actively endorsed Dogecoin and made jokes about it.
The price of the meme coin spiked to an all-time high of $0.74 the next day. However, due to the volatile nature of the crypto market and meme coins in particular, it quickly fell sharply soon after that. This demonstrated that Musk had a strong effect on the market and could bring quick gains for traders.
Musk’s love for Dogecoin continued after this too. Several times, he hinted at plans to integrate this meme cryptocurrency into his multiple businesses. In particular, he wanted Tesla to begin accepting it for payments.
Elon Musk’s Impact on Bitcoin price
Even earlier than his SNL participation which drove DOGE to the all-time high, in February 2021, Musk announced that Tesla had bought a $1.5 billion worth of Bitcoin and put it on its balance sheet. This pushed BTC to the first historic peak that year, which was slightly above $60,000.
The next move made by Musk was to announce that the company began to accept BTC for its electric automobiles. This was the trigger which drove Bitcoin to the all-time high in early April. However, after that Musk blocked Bitcoin payments over concerns of the environmental impact BTC mining has. Once that happened, the BTC price saw a significant plunge.
Since 2021, Tesla has been gradually selling its Bitcoin stash and now holds just a tiny bit of what it bought three years ago. SpaceX also holds Bitcoin.
Musk Helps GameStock and MAGA Soar
However, Tesla CEO’s tweets have impacted not only crypto prices. Several years ago, his influence extended to speculative stocks, namely GameStop (GME). This stock attracted massive attention at the start of 2021, when it faced the short squeeze conducted by traders from Reddit.
What Musk did was to amplify the stock’s momentum, which elevated GameStop’s price. He tweeted “Gamestonk!” in January of that year. Later, when Reddit traders performed the short squeeze, GME went up sharply from $17 in early January to $483 per share on January 28, which was a more than 2,700% rise.
The most recent effect Elon Musk’s public statement (not a tweet this time) had on a niche asset was this week. This was related to the upcoming US presidential elections in November and Musk’s extensive support of Donald Trump. Two days ago, the Tesla and SpaceX CEO attended Trump’s rally in Butler, Pennsylvania, where he rigorously urged the attendees to vote for the republican presidential candidate.
He said that if people do not vote, this will “be the last election.” After this fiery speech, the price of the MAGA meme coin and other politifi coins associated with Trump (such as TRUMP) went up tremendously. A smart trader took advantage of this and spent $360,000 on these Trump-related coins. He bought 2.4 billion MAGA and 18,364 TRUMP. This trader made a profit of more than $93, 000 over 17 hours of trading.
Both retail traders and institutional investors now closely monitor Musk’s tweets, watching out for the short-term impact they may have on the markets. Many even build their trading strategies based entirely on reacting to his tweets. There are algorithms which track his X account in real-time and automatically buy or sell assets depending on the context of what Musk says in his social media posts.
Still, his public messages/statements can not only make asset prices soar but also push them down hard as in the case of Bitcoin in 2021, which makes Elon Musk’s tweets a double-edged sword for crypto and financial markets. While his posts remain of high interest and can move markets, any trading based on them should be approached with great caution.
