HOW TESLA AFFECTS CRYPTOCURRENCY AND THE FUTURE PRICE OF DOGECOIN? : The mighty business tycoon and entrepreneur Elon Musk has been the talk of the town since the recent re-emergence of cryptocurrency in the trend which is sought to be booming nowadays. Elon is the genius behind Tesla, SpaceX, Neuralink, OpenAI, and The Boring Company. Briefly saying, he influences all the advanced technological fields of this modern era and contributes to almost every futuristic approach.
HOW TESLA AFFECTS CRYPTOCURRENCY AND THE FUTURE PRICE OF DOGECOIN?
The love-hate triangle between Elon, Twitter, and cryptocurrency is a real deal as his pronouncements on Twitter can be viewed as responsible for price fluctuations in cryptocurrencies.
- But can he solely be held accountable for the effects caused in the crypto market by his actions?
- Let’s figure out some analysis.
His first publicly visible encounter with cryptocurrency was in 2014 when he tweeted about Bitcoin being ‘probably a good thing.’ In no time, he was rumored to be Satoshi Nakamoto (pseudonym for the Founder of Bitcoin), to which he responded that he was introduced to BTC just a few years ago by his friend.
By 2019, the cynicism around cryptocurrency worked in favor of Elon and many other institutions, so they invested in Bitcoin in the form of hedge funds to sustain against inflation. It had the considerate potential and utility for the development of better business models.
The mercurial mindset of Elon Musk
Soon, Elon’s company Tesla bought $1.5 billion worth of Bitcoin in the fourth quarter of 2020 and announced that Tesla would accept BTC as payment and that led to a demand and supply kind of situation in the crypto market, and new investors began to buy crypto, trusting the reliable words of a corporate giant like Tesla backing its credibility about cryptocurrency being an excellent financial investment for exponential returns in future.
After this cheerful announcement, Bitcoin went to its all-time peak price of $58,000. Later in April 2021, he sold his 10% holdings and gained hefty profits of around $1 billion, which was a great gamble as his couple of tweets influenced the price of Bitcoin and it suddenly reached the skies exactly as he predicted, and he booked his profit by selling just 10% of his holdings and gaining profit almost equal to his investment with 41,000 Bitcoin worth billions still in his books. Moreover, he cloaked this sale by
saying that he just wanted to test the liquidity of the crypto funds.
But then, he suddenly tweeted, breaking the hearts of millions, that Tesla would no longer accept payments in Bitcoin by irrationally blaming the environmental impact it had on the society; this tweet caused a significant downfall of Bitcoin prices to $30,000, causing the first financial disaster in the crypto market.
In May 2021, he again played around with crypto to offer support to the BTC miners hoping for profits by just one tweet, and as usual, Bitcoin saw a sudden rise of 19%.
In communal terms, he still supports cryptocurrency over the traditional fiat currency, which is partially hypocritical, but considering a businessman and a revolutionary innovator, his moves in this crypto game were utterly genii.
That doesn’t possibly mean that his tweets were the only reason the crypto market fluctuated. Instead, his actions were somehow overlapped with the fixed price cycle of any asset:
- Accumulation (sudden price increase)
- Markup (settlement on a high price)
- Distribution (*BTC was overbought in this case)
- Markdown (gradual fall in price momentarily)
There were several exceptions of rising and fall in BTC prices even when Tesla wasn’t associated with Bitcoin or Elon tweeted anything related to BTC, so we could say it was a precise analysis performed on Elon Musk’s end to ensure a great profit and maybe contribution in re-emergence of cryptocurrency which was concealed since a long time due to its anonymous initiation or unsecured prologue.
According to many technical analysts, Bitcoin was overbought at the point causing an abnormal quick rise in the price but ultimately needed to fall and correct itself. Elon’s tweets just acted as catalysts in the trending game of cryptocurrency.
FUTURE OF DOGECOIN
The social media popularity and celebrity trend were responsible for the sudden emergence of Dogecoin. It was initially launched as a parody currency which seemed quite attractive to the investors due to its low price and high volatility but its authenticity, security measures, scalability are in a gray area to assess.
The endorsements or headlines it makes by Elon Musk prefacing its genuineness can be taken into consideration. Still, these tactics could be temporary too and can affect actual investors in positive as well as negative ways.
Looking at the current scenario of Dogecoin, it indeed has the potential to boom at a small-scale of 5-6 years to maybe $2-3 and can reach up to $9-10 in a decade.
The further skyrocketing of prices is dependent on the acceptance incorporates, significant recognition, celebrity endorsements, and consistent uptrend, which is entirely possible to happen in the additional years. Hence, it’s an excellent time for you to start your cryptocurrency journey with a firm hope of success.