Elon Musk, Crypto and Market Manipulation
Cryptocurrency markets are one of the most volatile among financial markets today (excluding the latest GME situation with r/wallstreetbets). Unfortunately, a lot of coins are being pumped and dumped lately, leaving investors disheartened and confused by the market’s reaction.
The success of r/wallstreetbets has demonstrated to the world how imperfect the financial system of today is, and how easily it can be influenced. By now, almost everyone has heard about the story of GameStop, a struggling company with an outdated business model that was heavily shorted by hedge funds such as Melvin Capital, Point72 and Citadel, seeing a massive increase in its stock’s price due to combined efforts of these retail investors.
Cryptocurrencies such as DOGE and XRP soon followed the trend and were shortly pumped and dumped after traders learned of the success behind the combined efforts of the r/wallstreetbets community. However the subreddit community maintains its core idea of giving power back to retail investors, while manipulators behind XRP and DOGE most likely initiated the movement for short term financial benefits.
When it comes to market manipulations by a high profile individuals, we cannot forget about *Elon Musk, who was charged by the SEC for his tweet where he influenced the price of Tesla with his tweet in 2018:
He received more push back when he aimed to bring the stock price down again in order to buy more with another tweet in 2020:
In cryptocurrency space, Elon Musk has tweeted about Dogecoin as far back as 2018:
And the developments of the past week can be considered another one of Musk’s “games” with his twitter account:
So what did it do the price of the currencies Elon was tweeting about? Let’s take a look:
And for Loki (rebranded to OXEN, ticker stayed the same):
This brings a question, whether these tweets could be considered market manipulation or ethical, when one man can change the course of a market capitalization in billions of dollars, by roughly 15%, with a single tweet. Some would say he is just joking and sharing his opinion, and that would most likely be right. We are all free to express our thoughts after all.
The image of Elon Musk has been extremely popular in internet culture and his twitter account has incredible reach with 44 million followers. Moreover, his image of a tech savvy, eco-friendly billionaire resonates extremely well with many people. It is easy to see how he has an influence on the crypto space.
Let me know what you think about his tweets in the comments! Would you consider it a market manipulation? Should they be regulated? Would you buy if you saw a tweet from Musk in regards to a certain crypto, or did you actually already buy based on his previous tweets?
TradingBull.io