The “Musk Effect” Is Back! What Elon Said About Bitcoin This Time?
2022-03-21 11:08:16
How Elon Musk's Comments Have Moved Bitcoin Prices
With an estimated net worth of around $221 billion as of March 2022, Elon Musk is the wealthiest person in the world according to both the Bloomberg Billionaires Index and the Forbes real-time billionaires list.
You would find that the richest man in the world has many titles on Wikipedia, such as an entrepreneur and business magnate; the founder, CEO, and Chief Engineer at SpaceX; early-stage investor, CEO, and Product Architect of Tesla; founder of The Boring Company; and co-founder of Neuralink and OpenAI.
But what Wikipedia doesn't tell you is that he has a much more famous name in the cryptocurrency world-the “Dogefather”. With Elon Musk as Dogefather, Dogecoin value soared to the moon after a series of tweets. Yes, Musk can move the crypto market just by a single tweet, that is why we call it the “Musk Effect”.
Apart from Dogecoin, Musk’s cryptocurrency tweets have also been particularly impactful for Bitcoin. For example, on May 13, 2021, Musk tweeted that Tesla would no longer accept bitcoin as payment due to environmental concerns about its heavy energy use. As a result, the price of Bitcoin dropped around 15 percent.
However, a month later, on June 14, Musk retweeted a news report from Cointelegraph and clarified that Tesla had only sold around 10% of holdings to confirm BTC could be liquidated easily without moving markets and Tesla would again accept Bitcoin once miners moved to “reasonable” clean energy usage. This tweet brought the Bitcoin price up 10 percent.
Elon Musk's Recent Comments on Bitcoin
This Monday, Elon Musk had posted a question on Twitter about the likely rate of inflation over the next few years.
Michael Saylor, another prominent Bitcoin bull and the CEO of MicroStrategy replied that weaker currencies would collapse, and the flight of capital from cash, debt and value stocks to scarce property like Bitcoin would intensify as USD consumer inflation would continue near all time highs, and asset inflation would run at double the rate of consumer inflation.
To his reply, Musk responded that “It is not entirely unpredictable that you would reach that conclusion", referring to MicroStrategy taking a $147 million impairment charge for the fourth quarter as Bitcoin price drop forced the company to write down its holding.
It was reported that MicroStrategy previously held over 125,000 Bitcoins. According to Bitcoin price live on Gate.io, these coins are worth more than 500 million at present.
Besides, Musk recommended that as a general principle, it was generally better to own physical things like a home or stock than dollars when inflation was high. At last, he emphasized that he still owned and won’t sell his Bitcoin, Ethereum or Doge.
Bitcoin, which had fallen as much as 3% before Musk’s tweet, briefly erased losses before retreating again. Data from Gate.io, a leading platform for trading cryptocurrency, suggested that all the three coins mentioned by Musk saw gains. Among them, ETH was up as much as 2.3% before giving up some gains while Dogecoin increased 3.8%.
And Bitcoin rose 3.4% initially to approach the critical $40,000 price level with a daily high at $39,933.55. Fortunately, Bitcoin kept the momentum going and eventually broke above $40,000 on Wednesday. At the time of writing, Bitcoin was still trading above $40,000 on Gate.io.
With an estimated net worth of around $221 billion as of March 2022, Elon Musk is the wealthiest person in the world according to both the Bloomberg Billionaires Index and the Forbes real-time billionaires list.
You would find that the richest man in the world has many titles on Wikipedia, such as an entrepreneur and business magnate; the founder, CEO, and Chief Engineer at SpaceX; early-stage investor, CEO, and Product Architect of Tesla; founder of The Boring Company; and co-founder of Neuralink and OpenAI.
But what Wikipedia doesn't tell you is that he has a much more famous name in the cryptocurrency world-the “Dogefather”. With Elon Musk as Dogefather, Dogecoin value soared to the moon after a series of tweets. Yes, Musk can move the crypto market just by a single tweet, that is why we call it the “Musk Effect”.
Apart from Dogecoin, Musk’s cryptocurrency tweets have also been particularly impactful for Bitcoin. For example, on May 13, 2021, Musk tweeted that Tesla would no longer accept bitcoin as payment due to environmental concerns about its heavy energy use. As a result, the price of Bitcoin dropped around 15 percent.
However, a month later, on June 14, Musk retweeted a news report from Cointelegraph and clarified that Tesla had only sold around 10% of holdings to confirm BTC could be liquidated easily without moving markets and Tesla would again accept Bitcoin once miners moved to “reasonable” clean energy usage. This tweet brought the Bitcoin price up 10 percent.
Elon Musk's Recent Comments on Bitcoin
This Monday, Elon Musk had posted a question on Twitter about the likely rate of inflation over the next few years.
Michael Saylor, another prominent Bitcoin bull and the CEO of MicroStrategy replied that weaker currencies would collapse, and the flight of capital from cash, debt and value stocks to scarce property like Bitcoin would intensify as USD consumer inflation would continue near all time highs, and asset inflation would run at double the rate of consumer inflation.
To his reply, Musk responded that “It is not entirely unpredictable that you would reach that conclusion", referring to MicroStrategy taking a $147 million impairment charge for the fourth quarter as Bitcoin price drop forced the company to write down its holding.
It was reported that MicroStrategy previously held over 125,000 Bitcoins. According to Bitcoin price live on Gate.io, these coins are worth more than 500 million at present.
Besides, Musk recommended that as a general principle, it was generally better to own physical things like a home or stock than dollars when inflation was high. At last, he emphasized that he still owned and won’t sell his Bitcoin, Ethereum or Doge.
Bitcoin, which had fallen as much as 3% before Musk’s tweet, briefly erased losses before retreating again. Data from Gate.io, a leading platform for trading cryptocurrency, suggested that all the three coins mentioned by Musk saw gains. Among them, ETH was up as much as 2.3% before giving up some gains while Dogecoin increased 3.8%.
And Bitcoin rose 3.4% initially to approach the critical $40,000 price level with a daily high at $39,933.55. Fortunately, Bitcoin kept the momentum going and eventually broke above $40,000 on Wednesday. At the time of writing, Bitcoin was still trading above $40,000 on Gate.io.
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