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Elon Musk adds 'Bitcoin' to Twitter bio with 43.7M Followers

Elon Musk adds 'Bitcoin' to Twitter bio

April 1, 2021 | 

832 Views | 

JOHN K MWANIKI | 

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The founder and Tesla boss had been declared the world's richest man severally after the rebounding of Tesla's share. Tesla was the darling of stock in 2021, which most thought would be the trend in 2021.

However, Tesla experienced an 85 slip in its shares, taking Elon Musk back to the world's second-richest man. Tesla's shoot from $30 billion to $185 billion in the market cap put the founder on a pedestal and the stock market's watch. 

The exciting part is that the automaker's impression of the stock market impacts the cryptocurrency market. While it is not the first time Musk has mentioned a cryptocurrency, his recent move of adding bitcoin to his Twitter bio has for sure swayed bitcoin's performance.

Elon Musk's Twitter activity and its impact on Bitcoin

The Tesla boss added bitcoin to his Twitter bio on 29th January 2021, and in just 30 minutes of his over 47 million followers seeing it, the crypto's price was on a surge. Within 24 hours, the cost of the crypto had a 20% growth.

Before he added bitcoin to his bio, the crypto's price was $32,000. In the first thirty minutes, the price has gone up to almost $38,000. The price then dropped to $36,000 from $38,000. It is suspected that this might have happened as a result of profit-taking. 

In the following hour, the price rose again to $38,000. Elon Musk's Twitter activity also affected the volume of trades. The time before changing his bio, the number of investors trading the crypto was just 5,000. The bio change increased the trade to 20,000. The number of transactions later dropped to a value close to the initial one. 

Essentially, his action led to an increase in the number of trades and the cryptocurrency price. 

Musk's impact on the cryptocurrency market

Elon Musk has a massive following on social platforms and big enough to influence the stock and crypto market. Over the years, he has been mentioning cryptocurrencies, and as expected, affected their trade and prices. 
Apart from adding bitcoin to his bio, here are other events worth noting.

1. Posts a picture of Dogecoin

Elon Musk started talking about Dogecoin back in 2019. Musk has, over time, posted memes about Dogecoin and even went further ahead to state that it is an underestimated cryptocurrency. In a different event, he also referred to Dogecoin as the "People's crypto."

The Tesla founder has been behind the crypto, terming it his favorite, something that had earned him the name "dogecoin CEO." Have all the mentions, tweets, and memes had an impact on the crypto? Certainly.

While the price rise was not as remarkable as the one for bitcoin, it was still significant. From a price of $0.01, it rose to $0.10. This is thanks to Elon Musk's attention to the crypto, alongside other billionaires and famous personalities. 

After several mentions, Tesla's CEO rallying around the cryptocurrency and tweets has led to the coin being top ten of the most valuable cryptos in the world. 

Do all MUSK mentions of cryptocurrencies have an impact

The one question running in all traders' minds is whether all tweets or online activities of the billionaires and celebrities impact the crypto market. The answer is no. Like other influential people, Elon Musk has made mentions of the cryptos from time to time and has not had any effect on the process or trade volume.

For instance, on 20th December 2020, Elon Must tweeted, "Bitcoin is my safe word." He went ahead and mentioned that the cryptocurrency is almost like fiat currency. While the tweet's expected effect would be a rebound of the price, it experienced a decline of 1.7%. There was also no notable change in the trading volume. 

The same happened to Dogecoin. Despite the regular mentions of the currency in tweets, its price has fallen by almost half since February.

Should investors be moving with the mention of cryptocurrencies by Elon Musk in his activities?

This might be a tough question to answer as there are instances where the tweets have affected the trading volume and price and others that have not. So far, the Tesla boss's online activities have seen a significant increase in cryptocurrencies' price and trading volume.

The other four activities saw no changes in the crypto market. The Tweets can still be beneficial to investors, but they need to be critical.

For one, they have to look at the timing. This makes the difference between when his tweets have an impact and when they don't. For example, a tweet on bitcoin after the crypto has already reached its all-time high may not impact the prices. 

The pre-trading atmosphere is also worth assessing before acting on his tweets. The time when they would have an impact is when the market is already volatile. 

As witnessed in the case of the Tesla boss, media does play a role in the cryptocurrency price. The same way a single tweet can exponentially increase the crypto value is the same way it can cause a slip. 

The role that media plays in the value of cryptocurrency cannot be overstated. Most investors rely on sentiments from other successful investors when choosing assets. For a long time, mass media has had an impact on the financial markets. 

Whether it is breaking news from current affairs or a tweet from a crypto influencer, it affects the exposure or acceptance of a cryptocurrency. This has been seen with tweets from billionaires like Elon Musk. Therefore, this means that following the activities of investors and renowned entrepreneurs could give you useful insights. 

Be it in interviews, or their social power, the information is powerful.

It is the trader's role to create a strategy to leverage the activities to their advantage. They must know how to strike a balance between the activities and the crypto market's current state. They can still use volatility, technical analysis, and other indicators to determine which move is the best to make.

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