How Elon Musk’s Tweets Affect Crypto Markets

Elon Musk. The richest man on the planet having an net worth of over 200 billion USD. Of course to reach this status, he understood the market. But now that he is at this status of fame and power, a new question is how does he affect the market?

Beneficial Tweets:

It’s clear that Elon Musk’s tweets generate a significant change in the market. Early January 2021, a tweet from Musk caused a small company’s stock to soar 1,500 percent in a few hours. However this does not only apply to stocks. Musk tweets have caused cryptocurrencies like dogecoin to benefit from the market. 

Companies:
While Musk’s tweets cause the public to follow a trend or pattern, his own decision heavily affects the market. In August 2020, Musk decided to implement a 5-for-1 stock split, which cut the price from 2,200 to 400 USD. This more affordable price led the stock to rise around 700 more percent by the end of 2020.

Not All Tweets are Beneficial:

Not all of Musk’s tweets are beneficial for him. In May 2020, Musk tweeted that Tesla’s stock price was “too high,” which caused the stock to lose 10% in the following weeks. This wiped 14 billion USD from Tesla’s market cap and knowing Musk has a 20% stake in Tesla, this caused him to lose 2.8 billion dollars in his net worth which at the time was 74 billion USD.

What Does This Mean For the Future:

Musk will continue tweeting and making decisions which will greatly affect the market. It’s just an outcome of having such a large net worth. However, traders and analysts can benefit from Musk’s personality and moves in the market for positive growth. As it is based on Musk’s thoughts and his own benefit it is impossible to predict a trend in his effect on the market. Musk not only is the richest man on the planet but has one of the biggest effects on the market as well.