Elon - The CRYPTic
Updated: Jul 4, 2022
Tldr; When Elon Musk Changes his Tone, Crypto Adjusts Its Tune
Elon Musk is one of the most polarizing figures in technology, with an ego to match and a taste for competitive business. His relationship with cryptocurrency has been complex and changing over the years, much like the cryptocurrency market itself.
Elon is one of the wealthiest mainstream businessmen, making his presence and support for the crypto industry crucial. Using Twitter, he has built himself a sizable following in the cryptocurrency industry. Musk's tweets are famous for his pronouncements on cryptocurrency.
The market appears to react to him every time he tweets on cryptocurrency. Following these tweets, crypto exchanges reported that their trade volumes often increase. This shouldn't be surprising because his Tweets have always been unpredictable. When questioned about the current condition of cryptocurrencies during his virtual presentation at the Qatar Economic Forum on 21 June 2022, Friday, Elon Musk said, "I have never said that people should invest in crypto,"
Let us look at Musk's relationship and his comments on cryptocurrencies like Bitcoin and Ether, as well as Dogecoin, which rallied the digital assets’ prices.
The Early Flings
In March 2014, Musk tweeted his first-ever mention of cryptocurrency. It was in response to a Newsweek report from a few days prior that claimed to have identified the real Satoshi Nakamoto, the enigmatic mastermind behind Bitcoin. The billionaire tweeted in response to a reporter's inquiry regarding his position on cryptocurrency - “Well, now that Satoshi Nakamoto has been discovered, I guess it is case closed.”
Later, during an interview at Vanity Fair's New Establishment Summit in October 2014, Musk was questioned about Bitcoin, and he responded - “Bitcoin was probably a good thing with the proviso that it would mostly be used for illicit activities.”
In November 2017, A former SpaceX intern claimed that Musk is Satoshi Nakamoto, the person who invented Bitcoin. But the businessman refuted the assertion in a tweet sent out shortly after. Musk tweeted, “Not true [that I founded Bitcoin]. A friend sent me part of a BTC a few years, but I don’t know where it is.”
In February 2018, Musk responded to a question about Bitcoin spamming on Twitter from one of his fans. He tweeted - "I literally own zero cryptocurrency, apart from .25 BTC that a friend sent me many years ago."
2019 was the most exciting leg of Musk’s journey into crypto, where he began taking cryptocurrencies seriously from a technological and possibly business model perspective.
In February 2019, Musk was on a podcast with ARK Invest's Cathie Wood and he said, “Bitcoin's structure is quite brilliant but, I'm not sure it's the best use of Tesla's resources to get involved in crypto. We're really just trying to accelerate the advent of sustainable energy, and it's like, quite energy intensive."
In April 2019, Musk mentioned Dogecoin (DOGE) for the first time. Musk tweeted, "Dogecoin might be my fav cryptocurrency. It's pretty cool."
As a result, Dogecoin's price increased, rising from $0.002 on April 1 to as high as $0.004 on April 4.
The Doge Affair
Musk picked up his flirting tweeting about DOGE again in December 2020, and it hasn't stopped since. Each post causes or at least contributes to significant DOGE price fluctuations. For example, between April 2019 to May 2021, the price of Dogecoin had climbed by an astounding 11,000%.
In February 2020, Musk posted a series of tweets starting with a single word - “Doge.” Following this tweet, DOGE prices rose by nearly 120 percent over the next four days.
Musk used the word "Dogue" to upload a mock-up of a Vogue magazine cover. Dogecoin rose 682%, from $0.0078 to $0.0610
"The people's crypto," he called Doge. Musk said that Dogecoin is more accessible than other digital currencies thanks to its active community and low price and has helped many new investors get started on their crypto journey. The price of Dogecoin rose 44% from $0.0314 to $0.0451 over the next two days.
"Who let the Doge out," he tweeted again, sending the price of Doge to a new high of over seven cents. This was the time when many DOGE enthusiasts expressed hopes that Doge could hit a dollar. Dogecoin rose another 57% from $0.0491 to $0.0769.
The SpaceX CEO tweets frequently about sending “Doge to the moon.” He posted a picture of "Doge Barking at the Moon," and this tweet sent DOGE prices above $0.10.
Musk followed up with the tweet, "Everything to the moon!" And the price of Doge hit yet another high. Dogecoin rose 330%, from $0.0766 to $0.1306 and then again to $0.3299.
Musk fueled speculations that he might promote Dogecoin on Saturday Night Live by tweeting “The Dogefather SNL May 8” before hosting. The tweet boosted Doge's price past $0.50 for the first time. Dogecoin rose 140%, from $0.2747 to $0.6618.
Musk tweeted here, "Cryptocurrency is promising, but please invest with caution!"
On the day of his "Saturday Night Live" performance in May 2021, Doge reached an all-time high of $0.73.
The highs were not for long as, After Musk dubbed the cryptocurrency "a hustle" on Saturday Night Live, Dogecoin plummeted. After reaching the alluring price of $0.70, Doge's breath ran out and it fell violently. It decreased by 70% to about $0.20.
The role of Musk with DOGE extends beyond memes. Since 2019, he has collaborated with Dogecoin engineers to enhance the blockchain. He tweeted in 2021 that the primary goal was to "improve system transaction efficiency." and the work is the work was "potentially promising."
A Dogecoin investor filed a $258 billion lawsuit against Elon Musk on June 17, 2022, accusing him of orchestrating a pyramid scheme to profit off the cryptocurrency. The lawsuit also compiles remarks challenging the value of cryptocurrencies from Bill Gates, Warren Buffett, and others.
Dogecoin's price dropped from its peak of almost $0.74 in May 2021 to roughly $0.063 in June.2022.
The Bitcoin (We Are on A Break) Phase
Tesla announced in February 2020 that it had acquired $1.5 billion worth of Bitcoin and intended to accept it as payment for its products. However, in May 2021, Musk said on Twitter that “ Tesla will stop using Bitcoin as a form of payment ” because of worries about how much energy it uses. Bitcoin dropped close to $43,000 as a result of Musk's tweet.
Musk has acknowledged that there are more worthy investments like a home or stock in companies, but he remains optimistic about cryptocurrencies like Bitcoin and Dogecoin. Musk has previously disclosed that Bitcoin, Ether, and Dogecoin are among his cryptocurrency holdings. But for the moment, SpaceX just has Bitcoin.
The Present Situation
Elon, during his virtual presentation at the Qatar Economic Forum, said, "In the case of Tesla, SpaceX, myself, we all did buy some Bitcoin, but it’s a small percentage of our total cash assets,"
Over the years, Musk has indeed said a lot about cryptocurrencies. Additionally, some of it has been highly promotional, making it seem like he was giving financial advice. However, Musk has never said, "People should invest in crypto," or any other equivalent, unambiguous advice about cryptocurrency investments ever.
“I have never said that people should invest in crypto,” Musk said in an interview with Bloomberg. But he clarified that he had a favorite cryptocurrency. "I intend to personally support dogecoin because I know a lot of people who are not that wealthy who have encouraged me to buy and support dogecoin, so I'm responding to those people,” Musk said at the Qatar Economic Forum.
Tesla has started accepting Dogecoin as payment for their merchandise. the CEO tweeted, “Tesla merch can be bought with DOGE, soon Spacex merch too,”
Elon Musk, the CEO of Tesla, announced only two days after being sued, on June 19, 2022, that he will continue to promote dogecoin and has plans to buy more of it.
After Twitter revealed in April that it had reached a buyout agreement with Musk, the price of Dogecoin increased by roughly 27%. In a tweet, Musk also referred to integrating Twitter and Dogecoin and stated that he was collaborating with the Dogecoin team to enhance system performance.