When the world’s richest man talks – or tweets – investors pay attention.
The post Why Dogecoin, Shiba Inu and Bitcoin investors should ‘follow’ Elon Musk appeared first on The Motley Fool Australia. –
Elon Musk is at it again.
The founder of global electric vehicle and battery maker Tesla Inc (NASDAQ: TSLA) is well known for his seemingly off-the-cuff media proclamations and tweets regarding leading cryptos and his own company.
And when Elon Musk has something to share, investors tend to take note.
Aside from impacting Tesla’s share price, the multi-billionaire’s tweets and comments have been known to affect the prices of Bitcoin (CRYPTO: BTC), Dogecoin (CRYTPO: DOGE), and Shiba Inu (CRYPTO: SHIB).
We’ll get back to his crypto moving powers shortly, and why it’s worth following along with his latest thoughts.
Tesla share price sinks
Musk’s latest foray onto Twitter over the weekend helped send the Tesla share price down more than 7% in intraday trading yesterday (overnight Aussie time). Tesla finished the day down 5%. It’s down another 0.3% in after-market trading.
In an email to the Motley Fool on Friday (before Musk’s latest tweet), global investment platform eToro’s market analyst Josh Gilbert said:
Elon Musk is the richest man in the world right now, so when he speaks, people listen. Musk has famously been in hot water previously over his comments regarding Tesla on his Twitter feed. Now, he’s better known for his tweets surrounding cryptoassets.
Indeed, according to the Bloomberg Billionaires Index, Musk is worth US$338 billion (AU$456 billion). To put that number in proper perspective, that’s $456,000,000,000.
Put another way, Elon Musk could give $1 million Aussie dollars to 456,000 people. That’s 4.5 times the full capacity of the Melbourne Cricket Ground (MCG), with every person walking away holding a million bucks.
That’s serious wealth.
How did Elon Musk send the Tesla share price lower?
Over the weekend Musk took to Twitter to poll his roughly 63 million followers.
The reportedly cash-poor billionaire asked whether he should sell 10%, or some US$21 billion, of his Tesla shares. It seems he may need that money if the proposed new billionaires’ tax passes into law in the United States.
That law would mandate taxes be paid even on unrealised capital gains. Of which Musk has quite a lot.
Musk tweeted, “I will abide by the results of this poll, whichever way it goes”. And the majority, 58%, of the roughly 3.5 million people who participated voted that he should sell his Tesla shares.
After tweeting that he “was prepared to accept either outcome” following the results of the poll, investors sent the Tesla share price down sharply once markets opened.
Elon Musk’s virtual token moving powers
When it comes to Musk’s market-moving powers, the virtual realm stands out.
Back in June this year, Musk helped propel the Bitcoin price higher when he announced that Tesla would accept the token as payment for its vehicles. Fast forward a few months, and Musk’s announcement that this would be suspended until Bitcoin mining was done using more sustainable energy sources saw the token promptly sink.
Then there are the so-called dog coins — Dogecoin and the newcomer, Shiba Inu.
Musk offered a tailwind to both tokens when he tweeted a picture of his Shiba Inu puppy in October.
Both digital coins have soared since then. Though when Musk clarified that he owns Dogecoin – along with Ethereum and Bitcoin – but not Shiba Inu, the Shiba Inu token sank in value.
Also in October, eToro’s Gilbert told us, “The Twitter page @uberfacts tweeted, ‘Elon Musk is predicted to become the world’s first trillionaire, thanks to SpaceX’.”
Musk, who currently has more than 63 million followers on the social media platform replied with, “In dogecoin”.
Musk has previously told his loyal followers that he owns Dogecoin and that SpaceX will accept the cryptoasset as payment. Along with others, Musk has had a sizable role in the adoption of cryptoassets, so although we may view Dogecoin as a ‘meme’ coin, if he says it has value, then it’s hard to discount his opinion.
Don’t lose track of the risks
While it’s worth keeping an eye on Elon Musk’s latest musings, there are risks involved, especially in the highly volatile world of cryptos.
According to Gilbert:
Musk has a huge responsibility on his shoulders, and at times, it feels like he forgets this before posting tweets. Of course, there can be benefits to following every tweet that the richest man in the world makes, as he has a vast knowledge of the cryptoasset market. However, this doesn’t come without risks.
An example of this is his appearance on Saturday Night Live, when he ‘joked’ about Dogecoin. The cryptoasset consequently plunged around 30% around the time of the show.
How are Dogecoin, Shiba Inu and Bitcoin performing?
Dogecoin is up 3.4% over the past 24 hours, currently worth 28.03 US cents. That’s down 62% from its all-time high of 73.76 US cents, hit on 8 May this year, according to data from CoinMarketCap.
Shiba Inu is up 6.7% in 24 hours, at 0.0057 cents. Shiba Inu is down 35% from its own record highs, set on 28 October.
As for Bitcoin, the world’s largest crypto by market valuation, it just hit a new record high. Bitcoin is up 3.7% over the last 24 hours, currently at US$67,478. That’s down just a fraction from the new all-time high set just an hour earlier, of US$67,772.
I wonder what Elon Musk will have to tweet about that?
The post Why Dogecoin, Shiba Inu and Bitcoin investors should ‘follow’ Elon Musk appeared first on The Motley Fool Australia.
Should you invest $1,000 in Bitcoin right now?
Before you consider Bitcoin, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bitcoin wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.