Source:indianexpress.com

The Impact of Elon Musk on the Bitcoin Market

Elon Musk is known as one of the richest people today and the CEO of Space X, Tesla, and The Boring Company. Also, he is well-known for his investments in different areas and activities related to popular topics in the world. The interesting thing is that he is mostly using Twitter as a way to communicate with the public, and there are over 60 million followers on this service.

What makes Elon so interesting to people is that he is not using Twitter only to promote his companies and products. It is not a rare case that he shares some of his opinions there. For example, there was a recent case when certain people from the UN started to claim that Musk, Bezos, and several other billionaires could manage to end world hunger by simply sharing some of their funds.

Elon said that he will sell some of his shares in Tesla Company if someone manages to assure him that his money will be a good and long-term investment that will efficiently help people from all over the globe.

Moreover, the discussion with Elon Musk related to cryptocurrencies was very popular. He also invested in Bitcoin, and at one point, he was interested in allowing this currency to be used on PayPal or for buying Tesla vehicles.

The popularity of cryptocurrencies is getting higher each year, and as you can see, even the richest people started to invest in these digital assets. The first thing to do when you want to buy crypto is to get a proper digital wallet. You can read more about cold and hot wallets on androidheadlines.com.

The connection between the activities of Elon Musk and the market of cryptocurrencies is that some of his actions managed to have a huge influence on this market. We are going to analyze more on this topic in the following article.

Influence on Volatility

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The first time Elon has mentioned Bitcoin and the market of cryptocurrencies was in 2014. However, he only stated that this technology and a new form of currency can have a huge potential. After that, he was not so interested in speaking about this area until 2019, when started to share tweets where he noted that investing in blockchain and buying crypto can be a big deal.

A few years after, Tesla bought BTC valued at over $1,5 billion at the moment, in February 2021. At the moment when they invested in this cryptocurrency, the price was already on positive trends, with a value of around $30,000. However, the impact of his activities can be seen shortly after. By the end of February, the price has reached nearly $60,000.

The first sign that Elon Musk is having a huge influence on the volatility of Bitcoin can be seen in April after his company Tesla sold around 10% of their digital assets. That caused a panic among many investors. However, the company announced that they sold the assets only to resolve some issues with liquidity.

Still, the biggest impact on the value was seen when many experts started to share reports about the influence of mining on energy consumption and how many countries, especially those who are still using coal as the main source of energy, are affecting the environment with increased activities related to Bitcoin mining.

That lead Elon Musk to share his thoughts and he agrees that it indeed can be a huge issue. Therefore, he declined to accept BTC in his companies and said that he will sell all of his assets. That was a huge deal for this market at the moment, and lead to a significant fall in value, which was around $30,000 back in July.

It needed a few months for the market to recover from this impact, and it is now stabilized again. Also, we have to mention that the price is reaching new records in recent times. The current value of Bitcoin is around $64,000. It is important to know those big investors and people who can influence big groups can have a big impact on various markets today like it was seen with Elon Musk and Bitcoin.

Other Factors That Are Impacting This Market

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Besides the activities of big investors, you have to know that other factors can have a huge influence on this market as well. First of all, there is a simple law of supply and demand. When people are looking to invest in these assets, it is natural that the value will go up.

The same is when the investors are trying to sell it frequently, which will most likely cause a fall in value. The cost-effectiveness of the process of mining is also important. With the expansion of green technologies related to energy production, mining will become much safer for the environment. That will make these assets even more popular and allowed in more countries.

Even though the competition is still unable to affect Bitcoin since this coin is a leader on the market, we have to keep in mind that there are several candidates that could reach the same popularity in the future, especially Ethereum that is offering some advanced technical solutions.

Moreover, there are the official regulations and laws related to this market, the legality of mining and possessing cryptocurrencies, and taxes that people need to pay by earning profit or trading with them. Many countries are looking forward to the implementation of cryptocurrencies, but there are some challenges to be resolved, especially when it comes to transparency and security.

The Bottom Line

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The fact that a single investor managed to affect the market on such a big scale is a sign that it still isn’t stable enough. That leads many people to become more careful when they are deciding about the amount they want to spend on such investment. However, with the ongoing trends where Bitcoin and other crypto are getting more accepted and used all over the world, they will soon reach the point where values will become much more stable, and there will be a lower risk of sudden falls in values.


Ricardo is a freelance writer specialized in politics. He is with foreignpolicyi.org from the beginning and helps it grow. Email: richardorland4[at]gmai.com

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