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Is the ‘Elon Musk Candle’ Effect on crypto fading?
Is the ‘Elon Musk Candle’ Effect on crypto fading?
Crypto

Is the ‘Elon Musk Candle’ Effect on crypto fading?

By Giorgi Mikhelidze - 11 Apr 2021

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Elon Musk, Tesla and SpaceX founder, one of the richest people on Earth who has a great influence on public opinion due to his achievements and his comments or actions regarding crypto-industry were always on the headlines, that had an important effect on the industry, helping the crypto-industry to thrive.

It was not predictable even one year ago that cryptocurrencies would be one of the most actively discussed or controversial topics during 2020 and 2021. 

One of the main reasons for it was the global Covid-19 pandemic that changed the ways of our lives. People became forced to stay at home and work, study, or take up new hobbies without going out, which directly caused the fact that most of us had plenty of time to become aware of many things that were unfamiliar with us before or did not have time to get into it. 

The global pandemic affected the economic market as well and many people were left without a job and source of income. This is when the popularity of cryptocurrencies began as people were given the opportunity to invest or trade with their money in something that would generate their profits without doing anything special to it. 

Additionally, there were a lot of companies or world-famous people who were making comments about financial innovation and making people believe in the miracle of cryptocurrencies. 

Timeline of Elon Musk Actions/Comments

Elon Musk has shown interest in cryptocurrencies several times and most often, he has used his Twitter account, with 46 million people, to convey his opinion regarding cryptocurrencies. At the beginning of February Elon Musk announced that his company Tesla was going to invest $1.5 billion in Bitcoin and said it may start accepting the cryptocurrency as a form of payment soon for orders.

  • January 29: Musk added “bitcoin” in his Twitter bio and that caused a 14% uprise in bitcoin’s price. 
  • February 1: Elon announced in the Clubhouse meeting that he was a supporter of bitcoin and considering that it would start to be accepted more widely, regretting not buying it several years ago.
  • February 4: Elon Musk tweeted the name “Doge” and stated that the altcoin Doge was the people’s coins. This caused the uprise of the coin’s price by 60%.
  • End of February: Elon Musk announced that the increased price of bitcoins, which happened very rapidly, was too quick. After that, the price slightly dropped.
  • March: Tesla officially announced that it was receiving bitcoin as a payment for the cars.

As we have seen, 2020 and 2021 are actively associated with crypto-revolution as it became spread over many fields, either the entertainment field, financial sector, or methods as payment. 

One of the most notable is the effect on the entertainment industry, for example, a lot of casinos were closed due to the global pandemic and the solution for this appeared to be online casinos. 

However, a lot of countries have different regulations on it and the government was able to track the actions of its citizens in this regard.

But, it was not difficult to find the solution to it and as a result, we have a new reality when it becomes possible to implement bitcoin during online gamblings, this is why we now say that 2021 Bitcoin gambling is a revolution for the industry. People were given the opportunity to enjoy online gambling without being afraid of violating the rules because the transactions were made anonymously and it is impossible for the government to track where its money is going from the country.

The Elon Musk effect is fading

As it is very well known for everyone, cryptocurrencies, and especially, bitcoin’s price is very volatile, and this is the main reason why people are generally very skeptical about it. 

At the time of writing this article, changes that are happening in terms of price fluctuation, make experts think that the Elon Candle Effect fades, as bitcoin retreats below 55K. 

But, the prices have slipped only of 0.63% over the previous 24 hours, so the Elon-Candle effect is not very short-lived. 

The reason that The market jumped early Wednesday after Tesla CEO Elon Musk made an official announcement that Tesla would now accept bitcoin as a payment option and that it won’t convert any receipts of the cryptocurrency back into U.S. dollars.

Conclusion

Finally, to sum up, cryptocurrencies were always a very interesting field for those who were involved in the financial market before but this past year made a lot of people become if not involved but at least aware of it. Since the price is regulated by demand and supply, demands on the cryptocurrencies were changing very often and even to say, based not on very strong arguments. 

Even a slight comment or changes not only in the financial sector but in politics or the entertainment industry could have affected its price. 

In its existing history, the biggest effect on bitcoin’s price caused Elon Musks’ actions/comments.

There are still a lot of predictions or forecasts regarding the future of it, but everything is just a matter of time.

Giorgi Mikhelidze
Giorgi Mikhelidze

Giorgi is a Georgia software developer with two years of experience trading on the financial markets. He is now working to spread the knowledge about the Blockchain in his country and share all of his findings and research to as many crypto enthusiasts as possible.

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