• September 25, 2023

Does Elon Musk’s Words Matter for Crypto in the Long Run?

By Liam Bussell, Head of Communication at Banxa

“I spoke to North American bitcoin miners. They undertook to publish the current and planned use of renewable energies and to ask the miners WW to do so. Potentially promising, ”Elon Musk tweeted End of May. So what’s going to happen? Bitcoin prices now? In the past few months, Musk has influenced the positions and values ​​of cryptocurrencies worldwide, namely Bitcoin and Dogecoin. As Musk sang the praises of the blockchain, the token rose to new heights. Then, seemingly overnight, Bitcoin’s value fell 40 percent.

The newbies are scared, but long-time HODLers know that this is just the ups and downs of crypto prices. We keep seeing tweets and headlines saying, “It’s down 24% since last month.” “Bitcoin is down 12% this week.” “Bitcoin had its biggest drop of all time today.”

BTC is still up 350% since January, a solid increase for a bull run. It’s almost like crypto doesn’t behave like stocks – so when the business media is looking at crypto, they don’t have a suitable metric to measure it.

When crypto prices began to rise earlier this year, mainstream investor began to see digital assets as a viable, smart investment. At the beginning of May 2020, a single bitcoin was worth $ 9,000. Almost a year later, the price had skyrocketed to more than $ 60,000, and now it’s somewhere in between.

Elon Musk was particularly fond of Bitcoin, the world’s largest cryptocurrency by market capitalization. He tweeted about it, got Tesla to put it on the books, and even posted an announcement that Tesla would accept Bitcoin as a form of payment. Then, as soon as he got on the train, he jumped off. musk tweeted, “Tesla has suspended the purchase of vehicles with bitcoin … Tesla will not sell bitcoins and we intend to use them for transactions once mining moves to more sustainable energy.”

Influencers aren’t jumping overboard yet

Mark Cuban also jumped on the crypto bandwagon earlier this year with his support for NFTs, Ethereum and DeFi. He’s been all over the media, social media, and mainstream, showing his support for cryptocurrency. The billionaire’s Twitter account appears to be devoted to his interest in NFTs, Ether, and Dogecoin.

It’s not just a billionaires game, however. Former porn star and TikTok sensation Mia Khalifa has also shared her crypto investments with her millions of followers. you tweeted, “Okay, I gave in and bought the dog stocks,” based on Dogecoin.

While some are singing their praises, others are not convinced that this newfound influencer love for crypto will have long-term effects. Still, influencers aren’t the only ones influencing the market, governments are too. For example, China recently doubled its crypto stance and forbidden Banks and payment companies from providing services related to cryptocurrency transactions. This ban was introduced in May, shortly before Bitcoin price Crash. Some say this ban on crypto may have had the same effect as Musk’s tweets. Crypto has been illegal in China since 2019 to curb money laundering threats, but many are still circumventing the ban through online trading.

Well worth pondering if these influence peddlers see the sheer amount of columnar inch media devoted to crypto during a bull run just as a huge, untapped resource and want their piece of the pie. It’s hard to tell if some of them own the coins they claim they own.

Price volatility is not a world-shattering concept

Volatility is not a new concept in the cryptosphere. If you look at the value of Bitcoin over the past 10 years, its frequent fluctuations between up and down are evident. We saw another huge one Price drop when Bitcoin jumped to $ 19,000 in December 2017 and then fell to nearly $ 3,000 in December 2018. While the price can drop sharply in the short term, it has been on a constant upward trend since its inception.

By and large, the trend for digital assets works in cycles of 2 to 2.5 years in 2011, 2014, 2017/18 and 2021. Between these periods, regulation becomes clearer and access to digital currencies for the mass market becomes easier

And even if another crypto winter looms over us all, it won’t be like the last.

Far from the crypto market of ICO scams in 2017, cryptocurrencies, digital assets, and the broader blockchain industry have matured and embedded in various niches, from finance to digital identification to gaming. Transparency and distributed ledger technology, as well as growth in venture capital investments, are driving the growth of the industry. The global blockchain market size was around $ 3 billion in 2020 and is projected to grow to $ 39.7 billion by 2025, which corresponds to an average annual growth rate (CAGR) of 67.3 percent over those five years, so a Blockchain Market Report.

DeFi, a massive subset of the broader crypto industry, stands as a $ 100 billion sector. Almost 1 million people are investing in some form of this crypto niche, which is a multitude of lending, trading and betting activities carried out almost exclusively on various blockchain networks using tokens, so Coin Gecko.

Crypto Winter or not, crypto will keep growing in the long run. Banking and financial services will be the largest market size as more traditional financial institutions join the movement and continue to help secure payments and transfers for customers. Venmo, PayPal’s mobile payment service, even recently added crypto to its ledger. If you now have a Venmo account, you can also buy, trade and invest in cryptocurrencies – Bitcoin, Ethereum, Litecoin and Bitcoin Cash – in the app.

At this point, crypto is just too big to stop. Large companies such as Amazon and Microsoft, have already started to integrate blockchain and crypto into their business models. Microsoft recently announced the launch of the Azure Confidential Ledger service based on blockchain while Amazon also recently developed its own blockchain technology. The companies use crypto as a means of payment and even want to set up their own blockchain platforms. The mass adoption of cryptocurrencies in the market is inevitable, even if people aren’t ready.

Nobody knows Musk’s case for the public shillings of Bitcoin, Doge, and crypto in general, but it’s a little surprising that he’s only discovered the energy problem now – especially so soon after he accepted Bitcoin as payment for Tesla. Is it vanity, a real misunderstanding about how crypto works, or maybe even a backlash from Tesla buyers and shareholders? Relying on the voices of influencers works in the short term, but 10 years from now, people won’t remember which celebrity said what. However, you will surely remember which crypto companies are keeping an eye on the price and moving with the times.

About the author

Liam Bussell was formerly Chief Marketing Officer @ Diginex (NASDAQ: EQOS), former CMO of BC Group (SEHK: 863), former Head of Marketing, World First (acquired by Alibaba) and is now Head of Corporate Communications and Investor Relations at BANXA .

A marketing director with 18 years of experience building fintech and technology companies from bootstrapping to publicly traded companies.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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