Elon Musk and Michael Saylor’s influence on crypto markets have made it as volatile as the ‘crypto winter’ of 2017
cryptocurrencyhas not been this volatile since the cryptowinter of 2017, according to a new report by TIE and eToro USA.
- The data analysis shows that the actions of influencers, on Twitter and on YouTube had a great impact.
- Comments made by Tesla and SpaceX CEO
Elon Muskand MicroStrategy CEO Michael Saylorhad the greatest impact over the last three months.
AdvertisementThe cryptocurrency market is still in its nascent stages, and a lot of price movement is driven by speculation — some that come from influencers, like American billionaires Elon Musk and Michael Saylor. Regardless of whether their cryptic commentary is meant as a joke, the impact is very real.
#Bitcoin https://t.co/lNnEfMdtJf— Elon Musk (@elonmusk) 1622768824000
That impact has now been measured in a new report by information services provider The TIE and social investment network eToro USA. According to their data analysis, every time Musk pushed out a tweet that mentioned Bitcoin, the price of the cryptocurrency fell by 1.6% on average over the next 24 hours. With Saylor, Bitcoins’s price sees an average increase of 4.4%.
With both of them shooting comments through the months of April, May and June — these three months have been the most volatile for markets since the ‘crypto winter’ of 2017.
Volatility as a characteristic of the nascent crypto market is no secret, but the impact of influencers appears to be increasing as digital assets come into the mainstream.
What was the ‘crypto winter’ of 2017?
The crypto market underwent a drastic price shift in late 2017, when prices — especially of Bitcoin — rose dramatically after sudden investor interest. However, the prices dropped by over 65% between 6 January 2018 to 6 February 2018. They remained at that point throughout that year.
Between April to June this year, most of the top 100 coins have seen double-digit price swings in both directions. “These extreme shifts show that sentiment is an indicator of price movement and demonstrate the importance of why investors should consider daily changes in sentiment and patterns over time as they make investment decisions,” said the report.
According to analysts if the price of Bitcoin consistently begins to slip between $30,000, it is possible another crypto winter will set in.
How much did Elon Musk’s tweets affect Bitcoin’s value
According to the report, there were three tweets from Musk that had the most significant negative impact:
- On 16 May 2021, he tweeted about the centralisation of mining, which drove prices down by 7.6% in the next 23 hours.
@ChainLinkGod @PeterMcCormack Bitcoin is actually highly centralized, with supermajority controlled by handful of b… https://t.co/ywYic43ofH— Elon Musk (@elonmusk) 1621189037000
- On 12 May 2021, Musk wrote about the use of fossil fuels in Bitcoin mining and the suspension of Tesla accepting the cryptocurrency as payment, which drove prices down by 9.4% in 24 hours.
Tesla & Bitcoin https://t.co/YSswJmVZhP— Elon Musk (@elonmusk) 1620857174000
- On 20 May 2021, the billionaire tweeted about how energy consumed by global Bitcoin mining exceeded energy requirements of medium-size countries, which drove the prices down by 11.3% in the next 24 hours.
@TeslaGong @wintonARK Bitcoin hashing (aka mining) energy usage is starting to exceed that of medium-sized countrie… https://t.co/bktenhcDxP— Elon Musk (@elonmusk) 1621541616000
While the overall impact of Musk’s tweets on Bitcoin’s prices were negative, they affected investor sentiments positively, according to the report. The overall tweet volume for Bitcoin grew by 44.4% because of his tweets, and investor sentiments rose by 23.5%.
His tweets about Tesla testing Bitcoin and selling liquidity to buy the cryptocurrency led to a positive impact on the price of the currency.
Within a few hours after a simple change in Musk’s bio to a single word, ‘Bitcoin’ sent the cost of the crypto asset soaring by over 20%, according to the report.
How much did Michael Saylor’s tweets affect Bitcoin’s value
Musk isn’t the only influencer who had such an impact on the prices of Bitcoin though. Tweets from Microstrategy founder Michael Saylor were followed by a 4.4% price increase on average, while investment sentiment fell by 0.8% and tweet volume jumped by 4.1%.
“Not all sentiment is created equal,” the report noted. “While it’s clear that sentiment is an indicator of crypto asset price, the data should not be looked at in a vacuum. Many events that play out online have roots offline and tend to be part of a multi-faceted situation,” it added.
Further, Musk and Saylor aside, The TIE and eToro also analysed samples of 100 crypto YouTubers. It found that these influencers too had an impact on the prices of Bitcoin.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
Bitcoin price slump cost Tesla $23 million — but the company still managed net income of $1 billion
WazirX, CoinDCX and other Indian crypto exchanges will reportedly have new advertisement guidelines in the next seven to ten days
Popular on BI
- Sensex, Nifty slip for second day; FMCG, IT stocks drag
- Air India puts together 'huge financing deal' for new fleet: CEO
- Marine species including whales and dolphins under significant threat from noise pollution
- ITR filing: Your guide to Form 26AS and why you should check for TDS discrepancies
- A complete itinerary for your 3 days in Mount Abu