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Elon Musk, Dogecoin, and his impact on Crypto-economy

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Source: Heisenberg Media https://commons.wikimedia.org/wiki/File:Elon_Musk_-_The_Summit_2013.jpg

Source: Heisenberg Media

Elon Musk is the most beloved, at the same time, most hated personality. As any of his fans would say, it is better to assume he’s the most misunderstood person, instead! If there’s anything else that is either misunderstood or loved/hated – it would be his tweets! Needless to say, Elon’s tweets have had a profound impact on many sectors, including Cryptocurrency. While we can debate whether it was for good or bad, at the end of the day the marks it left on the economy can be clearly seen in the form of numbers/facts.

Dogecoin

What better way than to start this article with Dogecoin. In fact, when the news came out, I even found it a bit too hard to digest. Apparently, Dogecoin – a digital currency, gained a lot of traction just from a series of tweets across different periods (no points for guessing who tweeted).

Source: CryptoWallet.com Images

Dogecoin was possibly Elon’s first public commentary on cryptocurrency. In the year 2019, he had simply put a tweet that stated his interest in Dogecoin. The tweet read – “Dogecoin might be my fav cryptocurrency. It’s pretty cool.”. Moments following this tweet could be best described as tumultuous. Search impressions skyrocketed, and even the currency saw a spike in investors. Elon did not stop there but went on to endorse the coin on many other occasions. This includes his Saturday Night Live appearance, wherein he could be seen talking about it.

What started as a meme/joke, Dogecoin was actually on the charts as one of the biggest digital currencies. To be fair, this wouldn’t have been possible without Elon’s frequent endorsements. Not just highs, recently, an unrelated tweet from Elon on AI led to Dogecoin falling 10%. The tweet read:

“I used to be in crypto, but now I got interested in AI”.

Tesla and Bitcoin

While Elon’s support towards Dogecoin was majorly in the form of tweets, he showed unwavering interest in Bitcoin by accepting payments. In 2021, Tesla made a huge announcement regarding their investment in Bitcoin. It wasn’t just a couple million dollars, instead a whopping $1.5 Bn. Following this, Tesla also announced it would accept payment in the form of Bitcoins!

Source: Ivan Radic

Though the initial announcement raised Bitcoin’s prices. Little less than 4 months ago, Elon posted a tweet saying Tesla stopped Bitcoin transactions. This time, mining Bitcoin impacting the environment in a bad way was cited as a reason. Further clarity was provided by Mr Musk through another tweet which affirmed his interest in Bitcoin. Elon wanted them to be mined using renewable energy resources.

Highlights of Elon’s tweets and their impact

1. “Dogue”

In January 2021, Elon started tweeting about Dogecoin. Post that, the currency saw a 300% increase in just 4 hours! It was short-lived as the prices fell in just a couple of hours.

2. Dogecoin Survey

This time, it was more of an interactive tweet as Elon had asked his followers whether they would want Tesla to accept Dogecoins. To make things even better, this tweet came on 11th May 2021 – a few moments after denouncing Bitcoin as a mode of payment.

3. Dogecoins for Tesla and possibly, SpaceX.

A little over a year after the poll – on May 22, 2022, Elon made an announcement citing the Tesla website accepting Dogecoins for Merch. Unsurprisingly, this made Dogecoins’ price surge for a few hours.

4. Unwavering support for Dogecoin post accusations

On June 19, 2022 – Elon tweeted: “I will keep supporting Dogecoin”. This came after accusations were made of him for running a pyramid scheme supporting Dogecoin. Apparently sued for a total of $258 Bn.

5. McDonald’s and Dogecoin

In a random tweet posted in January 2022, Elon said he will eat a happy meal on TV if McDonald’s started accepting payments in the form of Dogecoins. This tweet increased the price by 9%.

6. Dogecoin going places, and to the Moon!

On April Fools Day, 2021 – Elon tweeted that SpaceX is going to put Dogecoin on the Moon. As a man of words, since Dogecoin is not yet placed on the Moon – it is safe to assume that it was an April Fools’ prank.

7. Elon and 0.25 BTC

Elon came clean on Feb 22, 2018, citing he doesn’t own anything in the crypto space except for the 0.25 BTC given to him by his friend. This obviously didn’t stand as post-2018, Elon advocated for Cryptocurrency.

8. “One word: Doge”

Saving the best in the list for the last – this one tweet from Elon on Dec 20, 2020, saw a huge spike in the trading numbers for Dogecoin. To give you some context – before this tweet, Dogecoin was recording 9 DOGE/USDT trades per minute – roughly $1942 per minute. These numbers were 30 minutes before the tweet. For comparison, 30 minutes after the tweet, Dogecoin saw 775 trades per minute with a trading volume of $299,330 per minute!

The bigger picture.

Measuring the extent to which Elon’s tweets impacted the Crypto Economy would be hard. However, a lot of people have accused Elon of manipulating the market using these tweets so that he, himself, can make profits. If we look at the brighter side, Elon’s tweets have increased the awareness of digital currency amongst Youth and budding investors. As we move towards the age of a decentralized financial system, these investments in digital currencies can be considered baby steps.

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