I would like to make a disclaimer that I think it is completely idiotic that one man (who is at this point a genuine nut) is able to move a market 5-10% or more with just a random tweet. With that being said, there is some psychological validity to what he is doing.
When Elon tweets something about cryptocurrency, my immediate thought is "ugh not again", but then often do check and see what happened to the price of the coin. I am definitely not taking crypto advice or tips from him, but sometimes I do have the thought of "maybe I should buy it because a bunch of people are going to buy it".
There are a few people that are following Elon's picks religiously and revering him as a God, but there are many people such as myself that are simply expecting huge fluctuations as a result of masses of people FOMO'ing in.
The Psychology
The concept that is resulting in these mass movements and focus on specific cryptos is called "groupthink".
Groupthink is a phenomenon that occurs when a group of individuals reaches a consensus without critical reasoning or evaluation of the consequences or alternatives.
-Investopedia
When people see Elon tweet something like this catastrophe:
It becomes a binary situation. Is this tweet good or bad for Bitcoin and the way that it is viewed? If good: buy; If bad: sell.
Most people in the cryptocurrency market are in it to make money, and right now the market is susceptible to the word of influencers, namely Elon Musk determining market sentiment. If people are not believing in the technology, they are trading based on price, and when that happens, news or even tweets can result in swings of the market based on people reaching a groupthink consensus without thinking of the fact that the technology, regulation or mission has not changed.
Is Elon Doing This Intentionally?
Now the conspiracy theorist in me wants to believe that Elon knows that he has the ability to trigger groupthink and has been trading the largely unregulated markets leading up to and following his tweets to make massive gains; however, there is no proof of that.
I do think that this man truly enjoys f**king things up and likes to watch what happens as a result of his "trolling" on cryptocurrency. I saw today that he reviewed an interview by Vitalik and commented that he agreed with the post, which shot Ethereum up to around $4500 before crashing back down to where it began the day; I think that this has to stop sooner or later and I am glad to see that he is losing favor with the Bitcoin community; perhaps within a few years his voice will be equivalent to the girl who cried wolf and won't result in huge swings for the markets.
It is my personal opinion that despite the fact that his words are bringing eyes to cryptocurrency, it is very bad for the reputation of the ecosystem. No big money will want to be invested if this nutjob can just tweet and tank their investment at will.
Elon Musk's antics will be short lived in my opinion, but if he is using them right now to benefit himself strategically then I am forced to concede that this man is a genius... A crazy nutjob narcissist sociopathic genius. I hope it ends soon.
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