Last week, Elon Musk spoke at The BWord Conference, an event hosted by the Crypto Council for Innovation that examined the present and future of Bitcoin and other cryptocurrencies.
Musk repeated his support for Bitcoin and cryptocurrencies in general, stating that both Tesla and SpaceX held Bitcoin. He also said that he himself held Bitcoin, Ethereum, and Dogecoin. Musk noted that he wants to see bitcoin succeed in the long term and is not looking to sell just because he has pumped up the price.
Musk's appearance at the BWord Conference, together with the views he shared on crypto, caused both Bitcoin and Ethereum to rally with Ethereum climbing more than 12% for the day. The market rally demonstrates the massive influence that he still has over the crypto sphere. Given his status as the founder of some of the most forward-thinking and innovative companies in the world, it is hardly surprising.
Musk has the ability to engage and connect with an audience that values his views on future technological and societal developments in a way that few other people in the world can. Obviously, there are personalities with more social media following but none of them command the same type of attention. Musk is not looked to for his views on fashion or music or sport like most other massive social media personalities.
Instead, Musk’s most valued views are those that concern the future development of the world and of humanity. These of course are incredibly influential subjects to be an authority in and have a huge bearing on where people invest their money. The way Musk engages his 58.6 million Twitter followers, in his slightly awkwardly charismatic way, has the ability to move markets like no other Twitter personality.
These factors go some way to explaining why Musk's influence is even more apparent in the crypto sphere. Crypto itself is a nascent industry. It represents an entirely new way of storing wealth, investing, and trading. Because of how young crypto is and how it challenges the future of banking both structurally and technologically, it follows that a man who is so valued for his forward-thinking would be so influential in the industry.
In addition to this, despite an influx of institutional investment in crypto over the last year the market is still dominated by retail investors. This of course makes the market more volatile, more reactive and thus, more influenced by the words and actions of Musk.
Musk's influence over the crypto sphere has been both a blessing and a curse. When Tesla bought $1.5 billion worth of Bitcoin in February, it started off a Bitcoin run that saw the cryptocurrency reach a market capitalisation of more than $1 billion. Tesla’s purchase of Bitcoin brought mainstream attention to crypto that had never existed before. It also had a massive effect on the legitimacy of Bitcoin in the eyes of many average retail investors. Tesla's purchase represented a massive step for crypto that had to happen in some way or another to continue its journey towards mass adoption.
However, since then many of Musk's tweets have had a negative effect on the market and have been the subject of much derision and anger. His fixation on Dogecoin in particular and his Twitter statements that it could become the premium cryptocurrency were especially controversial. The Tweets caused dips in Bitcoins price and has made Musk a divisive figure within the crypto community.
Despite Musk's controversial profile there is still a lot of love for him inside the crypto community. Nowhere is this seen more clearly than in the dogecoin community. Dogecoin at the start of the year valued at less than 1c. After an initial rise that was independent of Musk’s influence it gained his attention. His tweets caused an incredible rise in value that saw the token go from 6c all the way up to 36c in a very short amount of time.
Dogecoin’s year-to-date culminated in Musk’s appearance on Saturday Night Live where we talked about dogecoin which saw it reach a year high of nearly 70c. Last week, during the BWord Conference, Musk reiterated his support for dogecoin and the price has stabilised above 20c after a recent dip.
Musk’s influence does not stop there though. He even has a token named after him now. $MUSK is the native token of MuskSwap.io, a decentralized exchange on the Binance Smart Chain. $MUSK was developed to “support” Elon Musk and can be used to farm and stake tokens. The cheap transaction fees of the Binance Smart Chain allow users to collect $TESLA, $SPACEX, and $STARLINK tokens that are all available in the MuskSwap ecosystem.
The purpose of the token is to form a community that supports billionaires and famous people who show interest in crypto and help elevate it. This project will, of course, have huge appeal to fans of the self-proclaimed Techno King of Tesla and demonstrates just how ingrained Musk has become in the crypto zeitgeist.
The Musk Effect
There can be no doubt that Musk’s influence over crypto is quite unique. There are very few people in the crypto sphere who command the same amount of both respect and mistrust. There are certainly no people with the same level of fame. In effect, Musk's relationship with crypto is a product of its growth. The “Musk Effect” is simply the result of crypto exploding into the mainstream. With crypto continuing to grow to become a bigger part of finance and banking, its love-hate relationship with Musk looks certain to continue.