Bitcoin price jumped more than 20% to$ 38,566 after Elon Musk, the richest person in the world, wrote bitcoin in his Twitter bio.
Elon Musk, the head of Tesla and the richest person in the world, changed his bio on Twitter to #bitcoin. The bitcoin price reacted instantly. During the day, the growth of the cryptocurrency exceeded 20% and reached $38,566, approaching its historical maximum. A couple of hours later, the bitcoin rate dropped again to $34,500.
Musk tweeted several more posts this week that had a powerful impact on investor behavior in the stock market. A day before, Musk tweeted that the new Tesla Model S Plaid car will allow passengers to play the role-playing computer game Cyberpunk 2077. The shares of the game producer CD Project jumped more than 18%. A few hours later, Musk ironically noted that "With Cyberpunk, even the hotfixes literally have hotfixes, but … great game." The Polish development team CD Projekt released the highly anticipated Cyberpunk 2077 game on December 10, 2020. But the release turned out to be a failure: gamers began to report dozens of bugs in the game. Since the release, the team has already published a number of bug fixes.
Musk did not ignore the jump in prices for GameStop shares provoked by users of the Reddit forum. He tweeted "Gamestonk!!" and attached a link to the WallStreetBets thread on Reddit.
“There’s an odd irony to Elon Musk’s ability to move the market, while attacking what he sees as unnatural market forces in short-selling,” Freetrade analyst Dan Lane told CNBC. “It might be that this is finally the time to have a discussion on the legitimacy of the practice.”
Vincent Flood, presenter of the “VideoWeek” podcast, which looks at the advertising market, said Musk’s tweets can “have devastating consequences for retail investors whilst he and his friends enrich themselves at the expense of the little guy.”
Rich Pleeth, an entrepreneur and tech investor in London, agreed. He told CNBC that Musk can “enrich himself with one tweet.”
“He is an innovator but that doesn’t mean he’s above the law,” Pleeth said.
Max Levy, head of business development at online investment management app Nutmeg, said, “This has always happened in capital markets,” listing Warren Buffett and Ray Dalio as other “influencers” on asset prices.