Is Elon Musk beneficial or detrimental to the cryptocurrency universe?

Ah the ‘Dogefather’ himself.

Is he offering harmless noise or exerting his influence knowingly?

Before we get to whether he’s good for crypto or a crypto curse, let’s assess his impact — because there’s no doubting Elon Musk (or more specifically, his Twitter account and 55 million followers) has played a pivotal role in the rollercoaster ride that is Bitcoin.

Case in point, Elon added #bitcoin to his Twitter account bio back in January of 2021. And the price of Bitcoin went soaring up, as if strapped to one of Musk’s own SpaceX rockets, spiking 20% in value.

That’s power.

Source: Coin Desk

But is it power being wielded for good or evil? And is Elon even aware of his influence?

The answer to the latter question is, almost certainly, yes.

Whether it’s his appearance on Saturday Night Live poking fun at dogecoin (leading to a 30% drop in value) or SEC reports that Musk flouted court ordered policies in 2019 and 2020 that required his tweets to be approved by Tesla company lawyers before hitting the Twittersphere, it’s clear Musk has the self-awareness required to understand his effect on the cryptocurrency universe.

But back to the first question, is Elon Musk (and the 280 characters he wields on Twitter) a force for good or evil when it comes to Bitcoin and the assorted digital currencies looking to find their foothold in the minds and virtual wallets of today?

I’d argue he is both.

Clearly, Musk has the power to set off significant swings in value which can cripple the investment of short-term traders who bought in, and saw their stock drop.

At the same time, investors should recognize that volatility has been a feature of cryptocurrency long before Musk arrived on the scene, and will remain once he’s gone. So in the long-run, Elon Musk isn’t likely to affect their investments.

Of course, we can’t just look at Elon Musk through the lens of traders and investors.

On a wider scale, Elon’s ability to set off seismic changes in price are likely to bring attention from regulators. And though this may dissuade investors in the short term (particularly those who wake up in the middle of the night, dripping in sweat, terrified to lose the ‘decentralized’ tag that means so much to them), there’s a school of thought that says some form of regulation (which is distinctly different from overregulation) may actually provide stability and help Bitcoin and other cryptocurrencies in the long term.

To wrap up, I’d be cautious to look at Elon Musk’s impact in the previous 6 to 12 months and make a blanket statement about his impact on crypto.

We’re still at the starting gate of where cryptocurrencies are going, and a big picture attitude is needed to escape the ‘alarmist’ approach that so many blogs, websites and forums seem to latch onto when analyzing an event without appreciating the wider context.

At a base level, Elon Musk has more people talking about crypto, and there’s no such thing as bad publicity, right?

—
A former professional rugby player, Adam S. Tracy brings over twenty years’ experience as an attorney, consultant and dealmaker with a particular focus on cryptocurrency, digital products, payments and immersive corporate structures. As an accomplished executive and advisor to high risk merchants and stakeholders, Adam has proven himself as a results oriented, decisive leader with proven success advising early market entrants, technology adapters, as well as established participants across a wide range of verticals. Adam Tracy’s attack-first personality allows him to excel in dynamic, demanding environments including complex corporate negotiations, distressed environments and regulatory investigations.

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