Crypto and Elon Musk, a complicated relationship indeed. With a single tweet he has the power to swing the price of coins drastically, and influence the entire crypto space. But what people don’t realize is, these price swings say more about crypto, than it does about Elon Musk.
How does he have so much power to shift the prices of cryptocurrencies? It’s because people have allowed him to have that power. In reality most of today’s crypto investors are not investing their money into it because they “believe in the technology”. Most of them invest hoping to make a quick buck. A get rich quick scheme. Only a handful of investors actually invest in crypto for its technology and its future potential. And the result is we have the majority of traders always on the lookout for some sort of catalyst to affect the price, and make a profit out of it. The recent past has proven that Elon Musk’s tweets have been the perfect catalyst’s for the crazy price swings we have seen in coins such as dogecoin and bitcoin.
It might be all fun and games for the billionaire, but the sad truth is a lot of people have invested their life savings into crypto hoping to make a quick buck, and have lost money during these crazy market swings.
What’s the solution? Sadly, there is no solution to stop the type of irrational volatility we have been seeing in the crypto space during recent times. The bubble has to burst. Unfortunately a lot of people will lose a lot of money during that process. But at the end, some time into the future, we might be able to see the true application of cryptocurrency in our day to day lives. It might be that we will have decentralized currencies and fiat currencies will be obsolete, or it might be that we might see governments making their own cryptocurrencies for their countries and citizens, like we have already seen with the digital yuan. But we will never know until the dust settles down.