Recently, Elon Musk has been actively posting on his Twitter account about Dogecoin and Bitcoin, which resulted in a growing interest in these coins and surges in their rates. At the same time, the news that Tesla Musk’s company acquired bitcoins for $1.5 billion led to new all-time highs of most main coins. What does the billionaire have to do with cryptocurrencies, and why has he already been under investigation for similar actions in the past? Today, we’ll try to find out!
Elon Musk and Cryptocurrencies
Tweets of Elon Musk, the second-wealthiest person in the world, have repeatedly created waves and caused a stir in the crypto market. Here’s a compilation of the top crypto-related tweets from Elon Musk over the years.
On December 20, 2020, Musk tweeted: ‘Bitcoin is my safe word’ and ‘Bitcoin is almost as bs as fiat money.’ However, this did not have an impact on BTC prices at that time.
On the same day, Musk tweeted ‘One Word: Doge.’ Following this, some reports claimed that ‘The average trading volume of DOGE/USDT in the 30 minutes before the incident was roughly $1,942 per minute, with an average of nine trades per minute. The average trading volume per minute in the 30 minutes following the Tweet was around $299,330, with 775 trades per minute.’
In 2021, billionaire and CEO of Tesla and SpaceX, Elon Musk, has become one of the main influencers in the cryptocurrency market. Users follow the entrepreneur’s Twitter for buy signals since Dogecoin and Bitcoin rates start to rise every time he writes about them.
On January 29, he changed his profile description on Twitter, adding #bitcoin to it. This action was followed by a tweet:
Immediately after that, the BTC price rose from $32,000 to $38,000.
On the same day, Musk tweeted about the meme coin DOGE. After the tweet, the price of Dogecoin galloped over 300% in four hours before dropping to nearly half of its new high in the following couple of hours.
Two days after that, in an interview with Clubhouse, Musk stated that cryptocurrency is one step away from widespread adoption and declared himself a supporter of it. The billionaire added that he should have paid attention to the digital money market 8 years ago. This statement again led to the growth of Bitcoin.
On February 6, Musk pinned the poll on his Twitter. 2.4 million users took part in the survey, 71.3% of which voted for Dogecoin. And two days earlier, on February 4, Musk first posted a photo of a flying Falcon 9 rocket in front of the moon and then added a Doge message. At the same time, the head of Tesla and SpaceX removed the ‘bitcoin’ hashtag from his profile description. This led to a 47% rise in the DOGE’s rate in less than an hour.
The next day, Musk posted a tweet featuring the Dogecoin symbol, a Shiba Inu dog, which gained over 505,000 likes in 12 hours. This led to an increase in the cryptocurrency rate by 27%.
On February 8, 2021, Tesla announced that it had invested $1.5 billion in Bitcoin in January. In a statement to the US Securities and Exchange Commission (SEC), the company noted that it plans to begin accepting cryptocurrency as payment soon. Tesla had changed its investment policy, thanks to which, it can now invest in gold, gold-backed ETFs, and other instruments in addition to digital money.
Against this news, Bitcoin rose in price by 14% in an hour, and the next day it updated its all-time high of $48,000. At the same time, Ethereum rates exceeded $1,820 for the first time.
On May 11, Elon Musk once again surveyed his Twitter followers to find out whether Tesla should accept DOGE as payment. He improved the decision-making process by conducting a poll.
In January 2022, Musk tweeted that he would eat a Happy Meal on TV if fast food giant McDonald’s started accepting Dogecoin. This led to an increase of 9% in the price of Dogecoin over the previous day.
On May 27, Elon Musk tweeted that Dogecoin could now be used to pay for official Tesla items and that SpaceX would soon follow suit. He wrote in his tweet: ‘Tesla merch can be bought with DOGE, soon Spacex merch too.’ The tweet caused Dogecoin’s price to skyrocket for a few hours.
On June 19, 2022, Musk tweeted: ‘I will keep supporting Dogecoin.’ Notably, the Tesla CEO had been sued for $258 billion for allegedly running a pyramid scheme to support Dogecoin.
On February 14, Elon Musk posted his Shiba Inu dog named Floki in a sweater with the inscription ‘CEO’ on the social network and thus pumped the rates of Dogecoin, SHIB, and FLOKI meme coins. He showed a new ‘CEO of Twitter’ to his subscribers in a series of tweets and wrote:
The new CEO of Twitter is amazing. So much better than that other guy! He’s great with numbers!
While the billionaire’s tweets about Floki continued to gain likes and get retweets, Dogecoin, SHIB, and FLOKI rates were going up. CoinDesk data showed that the price of DOGE and SHIB had risen by more than 6% over the past 24 hours. Meanwhile, the price of the FLOKI token increased by 64%.
On April 4, Elon Musk replaced the iconic blue bird logo of Twitter with an image of Shiba Inu. As a result, Dogecoin jumped more than 30% and then decreased by 8,2% after the bird logo was reinstated.
Is Elon Musk Satoshi Nakamoto?
Back in 2017, one of the former SpaceX interns wrote on his blog that Elon Musk created Bitcoin. The main arguments are the following:
- The Bitcoin white paper was written by a person who is well-versed in economics and cryptography. Musk founded Zip2 and X.com/Paypal and wrote software for them.
- The creator of Bitcoin was an expert in the C++ programming language. Musk knows it well and insists on using it at X.com and SpaceX.
- Satoshi Nakamoto’s wallet contains about a million bitcoins that have never been used. Musk could be a potential creator of Bitcoin, as he is one of the richest people on Earth and doesn’t need to sell these coins.
However, there are also strong counterarguments:
- Musk has repeatedly called 2008 one of the worst years of his life;
- The entrepreneur is under constant attention, so he could not hide such a secret.
Elon Musk was directly asked several times whether he is the creator of Bitcoin. However, the entrepreneur has repeatedly said he has nothing to do with this and does not own the first cryptocurrency. All Musk’s savings in Bitcoin are ’a tiny fraction of one Bitcoin token’ that a friend once gave him, but the billionaire lost access to it.
Moreover, Musk has not always spoken positively about cryptocurrencies. For example, in early 2019, he called for limiting Bitcoin mining, as it consumes a lot of energy. In February 2019, Musk also argued that Tesla would probably not support cryptocurrencies, as this is a poor use of the company’s resources. At the same time, he expressed confidence that, in the future, digital money will replace cash, which is a thing of the past.
Elon Musk and Tesla Share Pumps
Cryptocurrencies are not the only assets that Musk has pumped. In 2018, when Tesla shares were trading at around $350, Musk posted a joking tweet that he planned to buy them back at $420. This led to a surge in securities, litigation with the SEC, and problems with shareholders. As a result, the billionaire stepped down as chairman of Tesla’s board of directors and paid a $20 million fine.
Musk’s next joke about Tesla shares was more innocuous. The electric car manufacturer had launched red Tesla sports shorts with ‘S3XY’ embroidery on the back. It is an abbreviation for the company’s four electric vehicles: Model S, Model 3, Model X, and Model Y.
The shorts were created in reference to traders and investors waiting for the company’s share prices to decline and opened short positions on them, also called ‘shorts.’
In February 2021, Musk returned to the topic of jokes about ‘shorters’ by posting a message on Twitter:
Scammers Using Elon Musk’s Name
In the crypto industry, there are many scammers who create Twitter accounts of celebrities and arrange a ‘free giveaway’ of bitcoins. Using fake celebrity accounts, criminals offer users to send a certain amount of digital money to a specified wallet and promise to send twice as much back in return.
In the fall of 2018, Musk tweeted out an offer to buy some bitcoins. After that, he wrote that the support service of the social network decided that the account had been hacked and blocked it.
In mid-July 2020, the largest hack in the history of Twitter took place, during which more than 50 popular accounts were hacked. Scammers hacked the accounts of Elon Musk, Bill Gates, Vitalik Buterin, Charlie Lee, Justin Sun, Changpeng Zhao, and other representatives of the cryptocurrency industry. The social networks of Apple and Uber, the richest man in the world at that time, Jeff Bezos, and the rapper, Kanye West, were also hacked.
Using fake celebrity accounts, posted tweets about the readiness to double all bitcoins sent to a specific address. Despite the scale of the attack, the scammers managed to raise only a few tens of thousands of dollars.
Changes in Regulation Due to The Elon Effect
In early February, CNBC conducted a survey, during which it found out that Musk’s actions may require the intervention of financial regulators. After all, often, the tweets of an entrepreneur, even comic ones, incur serious financial losses for traders. For example, on January 29, 2021, after Musk tweeted about Bitcoin and provoked an increase in its price, the number of liquidations of BTC short positions exceeded $220 million in 4 hours, according to the Bybt service.
The financial regulator SEC, the New York Stock Exchange, and the NASDAQ platform refused to comment on CNBC about the businessman’s influence on various financial markets, particularly on the stock and cryptocurrency markets. At the same time, experts discussed the need to introduce measures to restrain the billionaire’s influence on asset rates.
Today, Elon Musk is playing with the financial markets and manipulating them literally with words by posting various posts on Twitter. Some traders and investors have already adapted to this situation and are actively following the billionaire’s social networks not to miss the start of the next pump. The other part of users risks losing their deposit due to short liquidation.
It is likely that financial regulators may not enjoy this situation, and they will take action against the head of Tesla and SpaceX and also come up with a way to protect the market from such manipulations in the future.
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