An outspoken supporter of cryptocurrencies, Elon Musk recently posted a tweet that said “SpaceX is going to put a literal Dogecoin on the literal moon”. The message inspired much doubt and controversy, seeing as Musk posted it on April Fool’s day.
It was not the first time Musk wrote on the subject, with the previous post triggering the coin’s all-time high of $0.065448. It went up 35% from its low of $0.048356 within 24 hours. Although the crypto’s price dropped soon after, it shot back up with a gain of approximately 25%.
Was Elon Musk Joking About Putting Dogecoin on the Literal Moon?
Most people don’t think the ardent DOGE supporter was kidding about putting DOGE on the moon. It’s only a question of how. Traders often use the term “to the moon” when referring to a situation in which they expect prices to soar up. In January 2021, the same phrase came up on Reddit during the GameStop saga. Users claimed they were going to pump a few “meme stocks” “to the moon”.
Another speculation is that the “techno-king” could be planning on doing it quite literally, given his space projects. In an earlier tweet in February, he had posted a meme featuring the Shiba Inu dog dressed in a spacesuit and holding a flag on the moon. The Shiba Inu is Dogecoin’s mascot. SpaceX is set to send the first civilians on a space flight to the moon in 2023.
Technically, Musk may send DOGE memorabilia physical coins up there. It wouldn’t be the first time SpaceX does something unexpected. Their first payload to reach orbit and land back on earth was a wheel of cheese. They sent it in 2010 when running flight tests for the Dragon cargo spaceship.
Musk also suggested earlier that his company was planning on sending the silliest imaginable thing on another flight. They later sent his Tesla Roadster, which has since been reported to pass Mars and has made its second orbit around the sun.
Why DOGE?
With his 45.8 million followers on Twitter, Musk has played a key role in making the once-obscure Dogecoin mainstream. Starting as a social media joke with memes about the Shiba Inu dog, it is now the world’s 7th most popular cryptocurrency.
In yet another tweet in February, Musk posted a poll for his followers asking them to vote for “the future currency of Earth”. His options were rather limiting – “Dogecoin to the Moooonn” against all other cryptocurrencies combined. Expectedly, his fans went for DOGE. Of the 2.4m participants, 71.3% stood by the meme-inspired crypto.
Musk has always expressed support for users of Dogecoin, his major concern being the issue of too much concentration. He would rather DOGE’s major holders sell most of their coins. He once even offered to pay in actual dollars for the assets. So far, the best way to trade in the coin is to find a platform that converts DOGE to BTC at the best rate.
Elon Musk is not head-over-heels for DOGE alone, though. He has always supported crypto assets, including Bitcoin. The electric car manufacturer Tesla, with Musk as chief executive, recently announced its purchase of $1.5 billion in Bitcoin.
They also disclosed plans to start accepting BTC as a means of payment for their vehicles. However, due to climate change concerns – some Bitcoin miners use coal as fuel – Tesla later suspended BTC payments in May.
The Musk Effect
The “Musk effect” is gradually becoming slang on the internet as his tweets continue to influence stocks and coin prices significantly. A lot of experts are now raising concerns as to whether inexperienced investors may lose fortunes following Mr Musk on social media.
Changing his bio on Twitter to #bitcoin alone resulted in a spike of over 20% for the coin in January. This followed less than 24 hours after the current world’s richest man caused a 12% surge in CD Projekt shares price. He had tweeted that Tesla would release a new model that would be able to run the Cyberpunk 2077 game.
GameStop shares, too, went sky-high thanks to only one word on Musk’s page – “Gamestonk” – and a link to a Reddit thread for the WallStreetBets. A few hours later, with the same ironical ability to move markets, Musk had Etsy’s shares increasing 9%. He had posted “I kinda love Etsy”.
A lot of industry experts are now calling on regulatory authorities to do something about the issue. In the Video Week podcast, which covers advertisement markets, Vincent Flood pointed out that Musk’s tweets could impact retail investors with devastating consequences.
An analyst at the British trading app Freetrade, Dan Lane, thinks it might be time to discuss such practices and clarify what’s acceptable.
In the meantime, the SEC refuses to comment on the matter. Ashley Ebersole, a former attorney at SEC and current partner with Bryan Cave Leighton Paisner law firm, thinks Musk is within his rights. It only becomes an issue if he gets paid to promote investment and does not tell the public, Ebersole says.
CONCLUSION
Whether Elon Musk is taking advantage of unsuspecting followers to get richer or not remains unclear. Influencers have always existed in capital markets — Warrant Buffet and Ray Dalio, among others. It would seem Musk is now the bellwether of technology markets, and paying close attention to his opinions may make you richer.
