He’s the 12-figure man with unprecedented power at his fingertips. Now, he could be backstabbing an asset he helped explode.
The unprecedented power Elon Musk possesses at his fingertips is almost unimaginable.
Aside from becoming one of the richest men alive, amassing an empire worth twelve figures from the success off multiple ventures, the South African-born tech mogul has transformed himself into somewhat of a godfather for the cryptocurrency industry.
Elon Musk and crypto: The story so far
In a market heavily dominated by hearsay, hype and above all, memes, it comes as no surprise that millions of wannabe crypto investors are hanging onto every word of the eccentric Musk, who has amassed a giant following as the “weird everyman” of the billionaire circuit.
Smoking a joint with Joe Rogan, naming his kid after an incomprehensible code for an aircraft, marrying a pop star and posting memes from niche subreddits have all helped the 49-year-old build a mythical persona adored by fans across the globe.
But the mountains a single man can move with a single tweet should be cause for concern as world markets sail out to uncharted waters. Observing cryptocurrency explode in recent years as it shifts from a niche online commodity (originally used to purchase items anonymously on the dark web) to a somewhat mainstream global asset, has been a sight to behold.
A massive boom for Bitcoin in 2017, where prices raised to a then-high A$25,000 per coin, resulted in a previously unseen surge in popularity with regular people throwing their hard-earned cash into online portfolios.
Today, it sits at A$56,462, after hitting an all-time high of $83,400 in April.
But a single move from Musk can see the currency take a gigantic tumble.
Recently the Tesla CEO hinted the electronic car company was considering selling all of its Bitcoin holdings, after announcing it would no longer be accepting it as payment for its hi-tech products.
It saw Bicoin’s price plummet and was another example of the billionaire’s ability to shift billions of people’s assets with a wave of a hand reminiscent of medieval kings.
Musk’s astonishing amount of power
While public sympathy for ailing crypto investors may not be the strongest — many have enjoyed becoming overnight millionaires on the back of drastic shifts in the market — the sheer volume of tangible wealth being created (and evaporated) on a daily basis has critics concerned.
In an article for Bloomberg, former investment banker at Goldman Sachs Matt Levine explained the unique rise of cryptocurrency and Musk’s disproportionate role in its short history.
“Imagine if you had gone to Warren Buffett 30 years ago — or J.P. Morgan 120 years ago — and told him: Here is a lamp. In the lamp is a genie. When you rub the lamp, the genie will come out and invent two assets,” Mr Levine writes.
“They (1) will not be subject to U.S. securities laws, (2) will trade 24 hours a day, seven days a week, and (3) will not represent claims on any businesses or cash flows.”
With cryptocurrency emerging in late 2009, government regulators have been unable to contain the genie in the bottle. Radical developments make it almost impossible for officials to legislate, especially considering the complexity of overseeing existing trade markets.
Adding Musk to the mix, who “exercises his power to manipulate coins with some frequency and with no apparent pattern”, and you have a complex world of value disproportionately influenced by a single human being.
In a Monday exchange with Twitter user @CryptoWhale, Musk sent Bitcoin tumbling 20 per cent with a single word.
“Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him…” CryptoWhale tweeted, to which Musk replied:
Dogecoin and Musk: A match made in heaven
It’s a match made in heaven: a coin based off a ridiculous internet meme, and the gregarious Mr Musk.
Musk took the crypto world by storm after almost single-handedly helping Dogecoin rise to the fourth-most valuable crypto on the planet, simply by mentioning it in a handful of tweets. The billionaire’s most recent move in Dogecoin’s favour came late last week, announcing he was “working with doge devs to improve system transaction efficiency”.
Musk said the work was “potentially promising”, resulting in a boom of over 30 per cent, reaching a high of USD $0.56 per coin at a market cap of $63 billion.
The latest Dogecoin surge followed Musk’s polarising Saturday Night Live appearance last week, which resulted in a 25 per cent drop for the currency.
“Call me the Dogefather,” Musk said, playing fictional financial expert Lloyd Ostertag in a skit.
“Lately, prices have been soaring for cryptos like bitcoin, ethereum and especially dogecoin. Dogecoin actually started as a joke based on an internet meme, but now it’s taken over in a very real way.”
Musk declared crypto an “unstoppable financial vehicle that’s going to take over the world”, but a sheepish admission that Dogecoin was a “hustle” was all it took for Dogecoin investors to sell their assets in droves.
Mr Musk also brought his mother out during the intro sketch to fit in joke about the trending crypto, which may not have helped the cause.
“I’m excited for my Mother’s Day gift,” she said. “I just hope it’s not Dogecoin.”
At the time of writing, Dogecoin has flattened out at $0.47 USD per coin — that is, until Musk decides to mention it again.