Tesla CEO Elon Musk is one of the most influential people alive. He is one of the people responsible for the ongoing shift to electric vehicles. He is also leading space exploration missions through his other company SpaceX and is also planning to connect billions via satellite internet as part of his Starlink Venture. His influence seems to have extended into the cryptocurrency market, and it appears to be bitter-sweet.

Musk contributed a great deal to Bitcoin’s rally this year after Tesla revealed that it purchased $1.5 billion worth of Bitcoin in February this year. His company was one of the few institutional buyers that embraced cryptocurrencies, sending the market into a strong bull run that pushed Bitcoin to an all-time high of $64,805 on April 14. However, Elon Musk has also been receiving a lot of backlash for tweets hurting the cryptocurrency market.

Understanding the extent of Musk’s influence over the market

Tesla’s investment in Bitcoin seems to have attracted a lot of market attention to Musk and his remarks regarding cryptocurrencies. He constantly uses Twitter to express his opinions, and every time he says something, regardless of whether true or false, the market reacts. Unfortunately, his tweets seem to be weighing unfavorably on Bitcoin’s performance.

A good example is his tweet in which he revealed that customers could no longer purchase Tesla EVs using Bitcoin. He announced his decision to suspend Tesla purchases using Bitcoin due to the cryptocurrency mining activity’s intensive energy usage, which he says is mainly powered by fossil fuels.

Bitcoin’s price dropped by 12.42% on May 13, the same day that Musk posted the tweet. Another Twitter user who goes by the handle @CryptoWhale tweeted that Bitcoin holders would be disappointed to discover that Tesla sold its Bitcoin holdings, to which Elon Musk replied with the word  “Indeed.” Many people assumed that his response was confirmation that he had already cashed in his company’s Bitcoins, thus encouraging a massive sell-off.

The Tesla CEO later confirmed through his tweet that his company had not offloaded its Bitcoin holdings. Unfortunately, the damage had already been done, and Bitcoin’s performance continued to drop, going as low as $42,001 on May 17.

Elon Musk’s influence over Dogecoin also became unfavorable, especially after setting high expectations through his tweets before his SNL appearance. The Tesla CEO failed to deliver an upbeat vibe for Dogecoin contrary to expectations, thus sending it on a free fall. Doge fell from its high of $0.73 to $0.41 on May 8, the same day he appeared on SNL.

Elon has been reckless with his tweets.

The recklessness on Elon’s part further extends to the fact that some of his tweets cause damage even if they are not accurate. For example, his tweet about Bitcoin being a threat to the environment due to its high energy consumption was debunked by research by Galaxy Digital.

The research reveals that gold and the fiat banking system consume far more electricity than Bitcoin. It invalidates Musk’s claim that Bitcoin mining activities pose a threat to the environment. Meanwhile, the Tesla CEO also received some criticism because his company SpaceX burns rocket fuel with a bigger carbon footprint than Bitcoin mining.

One would expect Musk to exercise moderation with his tweets especially considering that his company has also invested in Bitcoin. His massive influence over the crypto market is a double-edged sword. A single tweet about a cryptocurrency can either cause an uptick or a price crash. That kind of power from one person is toxic for the crypto market because it highlights his potential to manipulate the markets.

Maybe it’s time for Musk to take heed to the adage: “With great power comes great responsibility”!