The Elon Market: The Power of Influence
It’s Elon Musk’s world, we’re just living in it.
Cryptocurrencies are haunting me.
From July 2017 to May 2020, I covered finance and cryptocurrency at an ad company. Sometimes I wrote about the automobile industry. If the rising and falling of Bitcoin and different altcoins wasn’t occupying my time, it was Tesla’s quarterly reports.
I learned two things during this time. First, people were creating meme-based cryptocurrencies. And second, Elon Musk’s Twitter fingers had an incredible hold over the market.
When Musk tweeted in August 2018 that he was thinking about taking Tesla private, social media blew up, and TSLA shares increased almost 11%. A month prior, Musk tweeted that Tesla planned to ask suppliers for refunds to reach profitability. Shares dropped 6%.
And in true 2021 fashion, cryptocurrencies and Elon Musk have merged into one lane.
The Elon Effect
At the start of the year, Bitcoin hit the $30,000 mark. When I first covered BTC, having a bullish stance meant that you believed the digital coin would hit $5,000 in 2018.
Musk had been talking up Bitcoin on Twitter ahead of the January 2021 milestone. Come February, BTC reached an all-time high, moving past $46,000. Why? Because Tesla revealed a massive stake in the digital currency. The Palo Alto-based company also disclosed that it planned to accept Bitcoin payments for its products.
By the summer of 2018, my company shifted its focus from Bitcoin to altcoins, including Ripple and Bitcoin Cash. I also covered the rise in popularity of meme-based cryptocurrencies, like Dogecoin. Which, unless you live under a rock, has snagged the headlines recently — because of Elon Musk.
Taking His Dogecoin For A Walk
Elon Musk has recently backed Dogecoin, a meme-inspired digital token, on Twitter. And like with most of his tweets, they caused tangible results. Dogecoin rallied almost 48% in 24 hours to a record high on Monday, February 8.
Snoop Dogg has also offered his support, but the crypto world has its concerns.
Nic Carter, the co-founder of Castle Island Ventures, told CNBC that “a lot of retail punters are going to lose money on Dogecoin in the long term.” The venture capitalist said this is because “there’s really not much there in terms of interesting technology.”
But I could have told you that three years ago.
In June 2018, I wrote an article exploring whether we should trust meme-based cryptocurrencies.
The idea sparked after crypto figures discussed this genre — if you will — of digital assets at the Yahoo Finance All Markets Summit: Crypto. I remember there were more cons than pros. Such as how meme-based cryptocurrencies tend to be launched fast, increasing the risk of mistakes.
But, what set off the alarm in my head this week are the parallels between what Carter forecasted to CNBC with what Nick Tomaino, a former Coinbase employee, said about Dogecoin in 2018: “A lot of people are probably going to lose a lot of money.”
With Great Power Comes Great Responsibility
Stocks, cryptocurrency, whatever, you have to be careful when writing about money. “Buy, buy, buy” is never the angle to take — and that holds up in 2021. More people are stuck at home; more people are looking for passive income. And not everyone has the experience and skills to gamble well.
I’m not the only one who thinks this.
Mike Novogratz, CEO of Galaxy Digital, told CNBC that he wished Musk wouldn’t make these tweets. “It’s a meme,” he said. “It was funny for a little bit, but now it’s at a market valuation where people are going to lose lots of money in Doge.”
“Bitcoin has a real purpose, etheruem has a real purpose, lots of the stablecoins have a real purpose. Doge is kind of a meme, kind of a joke.” — Mike Novogratz.
What Was That? That Was Your Savings, Mate!
While my friends worked in the mall three years ago, I wrote about Elon Musk and Bitcoin and Dogecoin. Now it’s all I see people talking about on social media. And I don’t know how to feel about it.
It’s weird but also cool. Part of me wants some credit. The other part wants to push all my articles further down Google’s ladder so naive investors can’t find my words.
Either way, I’m going to mute the Dogecoin keyword on Twitter. Maybe Elon Musk, as well. I’m getting too many flashbacks of late nights and early mornings, hunched over my computer, watching the numbers change from green to red. Red to green.
