You could say that Elon Musk is to some cryptocurrencies what the president of the United States is to markets. His comments on his Twitter account, or now in his performances on television shows, have impacted the virtual currency market, just as those of the US president often impact the stock market.
The most recent proof of Musk’s influence occurred this Wednesday, when bitcoin fell 12% when he said that Tesla, his company, will not receive the cryptocurrency as payment for its electric vehicles.
The consequence of Musk’s tweets and jokes was precisely accentuated by a million-dollar transaction from Tesla, the company of which he is CEO. The company bought a large amount of bitcoin, the world’s largest cryptocurrency, making it the second largest participant in virtual currency.
But his influence does not stop there. Musk has also had an impact on dogecoin, a cryptocurrency that started as a joke and is currently the fifth most valuable in the world, according to CoinMarketCap.
Musk, who is also one of the richest people on the planet, played a character on a “Saturday Night Live” segment, which he hosted last weekend, in which he tried to explain what the cryptocurrency dogecoin was, admitting finally that it is just “a hustle and bustle.”
Following his comments, the virtual currency fell 40% to $ 0.44, after a 700% rally in a month.
It only took three days for the businessman to move to dogecoin again, but on the upside, after publishing a survey in which he asked if Tesla should accept the cryptocurrency, its price closed at US $ 0.49, although still below its maximum reached. last week of US $ 0.68.
Why is Musk’s influence on cryptocurrencies?
In simple terms because Tesla, his company, is the second largest buyer of bitcoins in the world, and bitcoin is the main cryptocurrency.
“What characters like Elon Musk do is take advantage of that and try to move the markets in their favor, surely they have benefited,” said Héctor Sosa, founder of Invierte guru.
Tesla reported that in the first quarter it sold $ 272 million in bitcoins, giving it a net profit of $ 101 million.
The investor and founder of Dave Pornoy, through his Twitter account, he questioned Tesla about whether it had made any profit from buying, inflating, promoting a hike and then selling the bitcoins.
Musk replied that Tesla sold 10% of its holdings of the cryptocurrency “to demonstrate the liquidity of bitcoin.”
Musk’s comments on the cryptocurrency market began to have an impact since last year, but they were accentuated after Tesla reported in February the purchase of bitcoins for US $ 1.5 billion, a currency that has also been accepted for purchase since March of their electric cars.
In that same month, his comments on dogecoin were accentuated by pointing out that the coin was heading to the Moon.
For something I said, because last Monday Geometric Energy Corporation, confirmed to Citizen Free Press that it will pay SpaceX to send a 40 kg satellite on a space mission with digital currency.
Prior to that, at the end of last January, Musk wrote “#bitcoin” in his Twitter account biography and sent a tweet saying: “In hindsight, it was inevitable”.
Tesla debuted in the world of cryptocurrencies as the second largest company in bitcoin, only after MicroStrategy, an American firm that creates and implements mobility applications, according to bitcointreasuries.org.
They came to stay
“Although subject to strong price fluctuations, it appears that bitcoin is finally gaining strong momentum, both among financial institutions and corporate treasurers,” Pierre Savarzeix, Equity Portfolio Manager at Seeyond, a Natixis IM subsidiary, recently wrote, in a report.
To date, the market value of cryptocurrencies reaches US $ 2.48 trillion, according to TradingView.com, it is as valuable as Apple technology.
“However, the widespread use of bitcoin still faces roadblocks, as cryptocurrencies still draw a lot of criticism,” Savarzeix said.