We have some big news for you if you are thinking of getting into the cryptocurrency market. Bitcoin is the most significant cryptocurrency in the market with the biggest share. It promises good returns on investment for all investors.
Institutional investment has been constantly increasing and bitcoin is becoming more mainstream now. The participation of Elon Musk has led to major changes in the market trends of this cryptocurrency. In this article, we will be exploring his overarching influence toward bitcoin and how it impacts the investments of others.
Even before he bought Twitter, Musk had been making waves with his tweets on the microblogging platform. His cryptic tweets led to significant fluctuations in the crypto market and led people to invest in not only bitcoin but also altcoins such as Dogecoin and CumRocket. One can know more about bitcoin’s impact on the market through bitcoinprime.software.
People immediately retweeted his random tweets and it soon became viral enough to take the market by storm. One needs to understand that there has been an increasing belief that Musk controls the market and also the wallets for major investors. It is natural to feel daunted by his tweets albeit cryptic and buy into whatever he places his money on.
Elon Musk is the founder of Tesla and through this company he invested a huge amount of US$1.5 billion into bitcoin. This has to be the biggest crypto investment on an institutional level at least in March of 2023. Institutional investment is always significant to look at because it can lead to bitcoin becoming more mainstream.
This is the course of action for Musk who announced that Tesla cars could now be bought cryptocurrencies as the primary means of payment if the buyer was so inclined. It would lead to more investors subscribing into bitcoin and keeping it in their investment portfolio for a long while.
One can easily look at the influence Elon Musk has on cryptocurrencies and specifically on bitcoin. His cryptic tweets make the prices rise and fall. Other announcements directly influence the price of BTC in relation to Tesla. When he had made it public that BC would be accepted as a mode of payment for Tesla cars, the price of the currency rose and reached US $58,000.
One soon saw a major drop occur in the prices but it did not happen in a vacuum. He had announced that Tesla would no longer be accepting payments in BTC. This decision owed itself to the fact that the BTC mining process is extremely costly and would not be the best decision right now. The drop in prices after this announcement was at US $30,000.
The mining process is expensive because the equipment needs to run for days on end to mine a single bitcoin. It is also hazardous to the environment which is one of the reasons why the initial withdrawal was announced. However, the price fluctuation owing to Musk does not end here.
In June 2023, he again announced that Tesla would be accepting payments in Bitcoin. This was somewhat different from the previous announcement because he now had a condition attached. The payment would only be accepted if miners used eco-friendly resources.
At least 50% of clean energy resources were deemed necessary for Tesla to accept the payment. The prices were once again impacted and the previous down rose up to US $40,000. It directly influenced how people trusted his business vision and related decisions.
What the Experts Say
One needs to look at both sides of the coin to get the full picture. A portfolio manager will do something quite a bit differently than an entrepreneur. Musk is here to do business and most importantly, to make some profit. Experts are of the opinion that his cryptic tweets are more to have fun than to guide people in their financial decisions.
The experts thus advise keeping your own faculties at hand and not blindly trusting random tweets albeit from a strong influencer. The dogecoin rise led to many people investing in it which has led to a significant market position even if it still has high price volatility. It might be a meme for him but people can lose their savings because of it.
One should be vigilant enough to do their research about any cryptocurrency before investing. It is important to understand that even if a billionaire is tweeting something, one should not blindly follow their footsteps. A choice which works for one investor might not be right for someone else.
Price Volatility and Musk
Anyone who is investing in cryptocurrency knows about price volatility and the risks it presents. It is true that his tweets have had a significant impact on the prices of both Bitcoin and Dogecoin.
The prices rise and fall almost immediately after his tweets go viral which adds to the volatility of a particular cryptocurrency.
His promotion of Starbase led people to invest in this particular currency and its value increased to about 6000%. It is obvious that this surge would not have happened if Musk was not there to promote it.
We have already mentioned how the price of Bitcoin rises and falls with the institutional investment of Tesla. Experts rightly recommend some sort of vigilance before blindly investing in whatever Musk promotes.
Elon Musk is undoubtedly the biggest influencer when it comes to impacting the prices of Bitcoin. He has been an influencer because of the foresight he has as a businessman which other investors and entrepreneurs value.
No one else’s tweets cause so much chaos in the cryptocurrency market as he does. The institutional investment through Tesla into Bitcoin led to the price rise of Bitcoin and a fall when the currency was refused as a means of payment. It seems like he decides when to give it a push to make the prices rise or fall.