The Rise & Fall of Crypto: The Elon Effect
Bitcoin’s advent dates back to 2009. It had a slow and steady start, moving from a few cents to a dollar in about 2 years. People still didn’t show any interest as the technology was new and most of them didn’t understand how the system works. Individuals who were on the look for new ways to make investments took the Bitcoin option but mostly forgot that they had money invested there.
The main reason for the rise of Bitcoin and cryptocurrency was and still is Social Media. Platforms like Reddit and Twitter made people aware of this currency that works on blockchain and provides freedom from the shackles of a Centralized Bank.
Due to its convenience, people started learning more about this new currency. Many tech enthusiasts and entrepreneurs made investments in it and found it very enticing as its price was rising every day. From $0 in 2009 to $100 in 2013 then immediately $1000 in the same year, it compelled people towards itself.
The Elon Effect
In 2021, 11 years after the release of Bitcoin, Musk declared that Tesla has bought a hefty $1.5 Billion of Bitcoin. It made Bitcoin’s price rise 20% on the same day. After a while, Elon said that Tesla is going to accept payments in Bitcoin, which made the currency reach an all-time high of $65,000!
And it’s not just Bitcoin, Musk tweeted the announcement of buying Floki, a Shiba Inu breed of dog from Japan, which made the altcoin Floki Inu jump to 30%. He didn’t even buy the currency but just named his dog after it and it escalated its price.
On February 4th, Musk tweeted, “Dogecoin is people’s crypto,” which raised the meme coin’s price by 50% on the same day. Following the support of Dogecoin, the currency has seen a rise of 15,000% in a single year.
In the mid of 2022, Musk said Bitcoin won’t be accepted by Tesla anymore due to its adverse impact on the environment. It led to a sudden fall in Bitcoin’s price and the currency hasn’t been able to recover since.
The sudden rise and fall of crypto due to Musk’s tweets is known as the Elon Effect in the crypto community. Whether one buys crypto or not, one knows what Musk is up to with his tweets and it becomes a hot topic of conversation. It has shown the crypto market it’s worst and best days as well.
Bitcoin and other crypto have adverse effects on the environment as they consume a lot of energy and release double the amount. Heavy mining rigs and expensive equipment is used so people could solve the mathematical problem as fast as they can and claim their credits.
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The cryptocurrency market is fairly volatile so tweets by influential personalities can add more fuel to the fire or completely extinguish it. If you are thinking of investing in crypto long-term, you shouldn’t let these influencers change your decision. But if you have got the time and energy to keep a constant check on news like these, you can gain huge profits by investing in crypto for the short term.