“Elon Musk tweeting is something that the crypto space has only been introduced to for the first time literally last year and this year. I think it’s reasonable to expect a bit of craziness, but I do think that the markets will learn. Elon is not going to have this influence forever.” – Vitalik Buterin, Founder, Ethereum
When the founder of the second largest cryptocurrency speaks on your tweets, it’s understandable that your twitter account holds some influence. With more than 56 million followers, Elon Musk has indeed captured Twitter’s imagination. Musk is among world’s richest billionaires, a founder of multiple revolutionary companies, and now also a pop culture icon. His increasing activity on Twitter indicates that he is self-aware of the influence he holds on his followers.
With his self-awareness, Elon Musk has influenced stock markets and cryptocurrencies various times just through his tweets. One cryptocurrency that Musk consistently talks about is Dogecoin. A currency based on the Doge meme, Dogecoin’s value has seen an increase of almost 25000% in less than a year’s time. When you can attribute movement of market by even 1% to one individual, it becomes difficult to refuse the influence of that person. So, let’s assess impact of Elon’s tweets on Dogecoin prices (all prices considered in USD):
Do Musk’s Tweets Impact Dogecoin Prices?
02nd April 2019: The first time Elon Musk tweets about Dogecoin, announcing it to be his favourite currency.
| Price at the Date and Time of the Tweet | Price After One Hour | Price After Three Hours | Price After 24 Hours | Price After 7 Days | Price After 30 Days | Price After 90 Days |
| 0.0025 | 0.0026 | 0.0025 | 0.0032 | 0.0029 | 0.0026 | 0.0033 |
18th July 2020: Tweet about the gargantuan ability of Dogecoin to overthrow the global financial system.
| Price at the Date and Time of the Tweet | Price After One Hour | Price After Three Hours | Price After 24 Hours | Price After 7 Days | Price After 30 Days | Price After 90 Days |
| 0.0030 | 0.0034 | 0.0034 | 0.0035 | 0.0032 | 0.0035 | 0.0026 |
20th December 2020: “Doge” *Mic drops*
| Price at the Date and Time of the Tweet | Price After One Hour | Price After Three Hours | Price After 24 Hours | Price After 7 Days | Price After 30 Days | Price After 90 Days |
| 0.0039 | 0.0046 | 0.0044 | 0.0053 | 0.0046 | 0.0095 | 0.0595 |
29th January 2021: The magazine among all magazines – Dogue
| Price at the Date and Time of the Tweet | Price After One Hour | Price After Three Hours | Price After 24 Hours | Price After 7 Days | Price After 30 Days | Price After 90 Days |
| 0.0238 | 0.0287 | 0.0342 | 0.5142 | 0.0508 | 0.0501 | 0.3158 |
04th February 2021: Elon tells Doge – “You seek Hakuna Matata”
| Price at the Date and Time of the Tweet | Price After One Hour | Price After Three Hours | Price After 24 Hours | Price After 7 Days | Price After 30 Days | Price After 90 Days |
| 0.0501 | 0.0494 | 0.0494 | 0.0450 | 0.0735 | 0.0507 | 0.6439 |
06th March 2021: Doge spelled backwords is Egod
| Price at the Date and Time of the Tweet | Price After One Hour | Price After Three Hours | Price After 24 Hours | Price After 7 Days | Price After 30 Days | Price After 90 Days |
| 0.0497 | 0.0519 | 0.0518 | 0.0512 | 0.0553 | 0.0582 | – |
14th May 2021: Improvements incoming
| Price at the Date and Time of the Tweet | Price After One Hour | Price After Three Hours | Price After 24 Hours | Price After 7 Days | Price After 30 Days | Price After 90 Days |
| 0.4297 | 0.4767 | 0.4807 | 0.5539 | 0.3955 | – | – |
Looking at a snapshot, it becomes visible that Dogecoin’s prices have consistently increased post Elon’s tweets, and have fallen in only 6 out of the 39 instances considered.
| Date of the Tweet | Relative Price at the Date and Time of the Tweet | Relative Price After One Hour | Relative Price After Three Hours | Relative Price After 24 Hours | Relative Price After 7 Days | Relative Price After 30 Days | Relative Price After 90 Days |
| 02nd Apr 2019 | 1.000 | 1.009 | 0.998 | 1.280 | 1.150 | 1.012 | 1.300 |
| 18th Jul 2020 | 1.000 | 1.127 | 1.122 | 1.144 | 1.060 | 1.162 | 0.857 |
| 20th Dec 2020 | 1.000 | 1.173 | 1.107 | 1.340 | 1.166 | 2.406 | 15.137 |
| 29th Jan 2021 | 1.000 | 1.206 | 1.438 | 21.614 | 2.137 | 2.108 | 13.274 |
| 04th Feb 2021 | 1.000 | 0.985 | 0.985 | 0.898 | 1.466 | 1.012 | 12.845 |
| 06th Mar 2021 | 1.000 | 1.045 | 1.044 | 1.030 | 1.113 | 1.172 | – |
| 14th May 2021 | 1.000 | 1.109 | 1.119 | 1.289 | 0.920 | – | – |
What Are The Implications?
Data vindicates that Elon has effectively used his clout to launch Dogecoin to the moon. The question is, for how long can this bull run continue? Even so, would it be Elon Musk’s popularity that impacts Dogecoin’s prices?
Would you invest in stocks or cryptocurrencies that have been endorsed by influential personalities? It doesn’t seem long before common folks would move away from professional financial advisors and refer to social media trends for their investments.
