Wednesday 10 February 2021 5:18 pm

Musk's mischief sends shockwaves through crypto markets

Elon Musk’s mischievous games with cryptocurrency had another massive market impact this afternoon after the Tesla chief repeated his endorsement of Dogecoin.

In the wake of a simple, one-line tweet announcing he had just purchased a quantity of the altcoin for his nine-month-old son ‘X Æ A-12’, the colourful entrepreneur sent the value of the seven-year-old coin spiking to $0.083 before settling around $0.074 within the hour.

Elon Musk Doge tweet

More interestingly, and of concern to cryptocurrency traders, was the curious effect his announcement had on the wider market – particularly Bitcoin, which had already started moving downwards from almost $47,000 before tumbling towards $44,000 soon after the tweet.

Only days earlier, the South African SpaceX mastermind had strapped a rocket to the value of BTC after confirming Tesla had invested $1.5bn (£1.1bn) into Bitcoin and were looking at accepting the original cryptocurrency as payment.

Prior to that, Musk was joined by rapper Snoop Dogg and ageing rocker Gene Simmons as they gave Doge the thumbs up last week in a series of seemingly-orchestrated tweets about the project which was launched as a tongue-in-cheek rival to Bitcoin in 2013.

Snoop Dogg Doge tweet

While the celebrity endorsements and dramatic market moves have been embraced by many day traders and crypto enthusiasts, Musk’s impish games are being frowned upon by hardened financial figureheads who have branded the tweets as ‘disconcerting’.

Venture capitalist Nic Carter – an outspoken supporter of Bitcoin – warned Musk’s playfulness could lead to people losing money.

“Unfortunately, a lot of retail punters are going to lose money on Dogecoin in the long term because there’s really not much there in terms of interesting technology,” he told CNBC.

Empty shell

“The only thing it can really do is be zombified and stick around and be an empty shell for people’s expectations and for their entertainment.”

His damning assessment was echoed by Mike Novogratz – one of Bitcoin’s earliest investors, and CEO of Galaxy Digital.

“It’s a meme,” he slammed.

“It was funny for a little bit but now it’s at a market valuation where people are going to lose lots of money in Doge.

“Bitcoin has a real purpose, Etheruem has a real purpose, lots of the stablecoins have a real purpose, but Doge is kind of a meme, kind of a joke.”

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