Elon Musk and His Idea Of Cryptocurrency: A Dance Of Trends
Elon Musk and Twitter both have a penchant for trends. The one thing we must all acknowledge now, after the saga of Elon’s tweet and Tesla’s denial of accepting bitcoin as payment, is that cryptocurrency has a considerable degree of risk.
If we follow the trends we can see that Elon Musk has quite well-used cryptocurrency as a source of his entertainment. He started with Bitcoin, referring it’s structure to be“quite brilliant” and giving it an edge over the paper currency, being the environment-friendly person he is. This series continued and several other tweets followed in the same context thus raising bitcoin’s market value.
Musk is rather popular for his love of memes as well, so much that he promoted a cryptocurrency named Dogecoin (doge being a popular meme template). Dogecoin actually started as a joke between two engineers, which the market later took seriously. Musk called it “people’s currency” and even announced that Space-X will launch a DOGE-1 mission to the moon, which basically means they will be accepting dogecoin as payment for it.
Recently the cryptocurrency market experienced its biggest drop after Musk once again expressed his concern for the environment and how bitcoin mining is using excessive fossil fuels. One tweet from him turned the scenario upside down, and the people who were advising others to invest in bitcoin suddenly became part of a meme fest.
This raises concerns about Musk’s amount of control over the cryptocurrency market.Musk runs Tesla and Space-X, both of which can accept cryptocurrencies as payments and he also has a significant social media clout. He is a perfect idol for entrepreneurs and has done some remarkable work in his field. What I can gather from this is that Musk had overtime built an army of his followers and carefully used them to set trends. But, as a result of his recent activities, his army is gradually dissolving. On one hand he is working for environment conservation by prioritizing the use of alternate fuels; he once gave away all his patents of solar energy for the greater good. On the other side, he merely leveraged his popularity to convey mixed messages to his supporters before abruptly withdrawing from his position, leaving thousands of his admirers befuddled and stuck.
What this article intends to deliver is that following the herd has never borne good results. While it is good to look upto strong and powerful people, awareness about the same is even more important. The recent scenario rings bells about the importance of research, particularly on the investments we make. It is not enough just to invest somewhere because it is making headlines, what is important here is to know the platform, measure the risks, and at the same time set our priorities right. For example, while both Bitcoin and Ethereum are cryptocurrencies and use blockchain technology, bitcoin is more of an alternative medium of exchange and store of value while ethereum was proposed as a platform to facilitate immutable, programmatic contracts, and applications via its own currency.
In today’s world where influencers outweigh the followers, the quote “better safe than sorry” never sounded more appropriate.
FY M.Sc. Financial Economics