Here's the impact of Elon Musk's tweets on Bitcoin and Dogecoin prices

 

Elon Musk's tweets about Bitcoin and Dogecoin caused a spike of nearly 20% for both currencies, according to a study by the Blockchain Research Lab.

The CEO of "SpaceX" has about 45 million followers on Twitter.

On January 29, when Musk updated his Twitter résumé and changed it to Bitcoin, he launched a new trend that saw many YouTube and Twitter celebrities do the same.

Since then, a lot has been speculated about whether Mask's tweets can really affect the cryptocurrency markets.

But now jl release a study confirming that it can indeed.

Mr. Lennart Antti, a researcher at the Blockchain Research Lab, said:

Based on six recent cryptocurrency activities on Twitter, we identify an extremely high anomalous trading volume after every Elon Musk tweet.

We also discover remarkably abnormal returns of 18.99% for Bitcoin and 17.31% for 'Dogecoin' across various timeframes.

With strength comes responsibility:

Elon Musk's ability to influence the movement of cryptocurrencies has consequences.

Ante stated:

If one tweet could lead to an increase of $ 111 billion in Bitcoin's market value, a different tweet could also erase a similar value.

But this is the nature of cryptocurrencies

Whereas, crypto projects are designed to be decentralized and controlled by the public, not governments.

So the fact that the average citizen is able to influence the price of the cryptocurrency may not be that important.

"Ante" added:

People have the right to think about it, and it will continue to think about that, especially in the case of financial profits or losses.

Elon Musk's tweets study:

The study looked at six events linked to either Bitcoin or "Dogecoin".

Regarding Bitcoin, the most important notes focused on January 29, 2021, when Mask updated his resume on Twitter and converted it to the term Bitcoin and tweeted the following:

Later, it is inevitable

Regarding Dogecoin, the study looked at tweets dating back to July 2020, but the most important note again looked at a bulk tweet and update posted on December 20, 2020.

On that day, Mask tweeted:

One word: “Dogecoin”

His biography also happened to the former CEO of "Dogecoin".

To ensure that the study captured only the market movements that Mask's tweets were responsible for influencing, “Ante” compared the market movements observed before Mask’s tweets over the nine hours prior to them.

Then compare these numbers to actual market movements that occurred around Mask's tweets themselves.

The difference between these numbers gave "Ante" isolated and objective numbers that can be traced back to the influence of "Mask" tweets.

How did Elon Musk pump the price of Bitcoin?

When Musk changed his CV to Bitcoin, he not only set a trend in the next movement of Bitcoin but also influenced many other popular accounts that updated their CVs as well, until Bitcoin achieved returns of nearly 20%.

After Musk changed his biography on Twitter, Bitcoin rose 6% after 30 minutes.

It doubled to 13% per hour, and peaked at 19% in seven hours.

Ante commented on this effect by saying:

They do not appear to be reactions but rather independent actions that lead to massive increases in trading volumes and significant, positive, abnormal returns.

At the time Musk updated his Twitter account, Binance was overloaded with requests.

CZ, Binance CEO, speculated that Musk may be the cause of the increase in demand, but this cannot be said.

 How did "Elon Musk" pump the price of "Dogecoin"?

Musk tweeted about “Dogecoin” on several occasions, but the most prominent example in which the coin benefited from his tweets was on December 20, 2020.

On that day, Mask tweeted:

One word: Doug.

He also changed his CV that day to the former CEO of "Dogecoin".

This tweet alone resulted in the currency gaining 8% in just five minutes, according to researcher "Ante".

An hour later, this effect peaked at 17%.

Also recently, "Musk" made a series of tweets about "Dogecoin", but the effect appears to be weaker than it was earlier, as the currency has not appreciated as dramatically as it was in the past.

However, the effect is still there.