A review of the influence of Musk and Thaler’s tweets: how “scumbags” and “big gamblers” disrupted the crypto market
The cryptocurrency market is mainly driven by investor sentiment, and most social conversations begin on Twitter. Over the years, we have seen some trends and events affecting cryptocurrency prices on Twitter. Recently, two well-known figures have had an impact on the cryptocurrency market through their Twitter activities; Elon Musk and Michael Saylor. With 57.6 million fans of Musk and 1.3 million fans of Saylor, it can be said that their tweets have attracted a lot of attention online. In fact, the attention they get is enough to affect the price of digital assets. A typical example is when Musk simply changed his Twitter resume to the word Bitcoin, which increased the price of BTC by 20% within a few hours.
In this study, we will not only study the impact of Elon Musk and Michael Thaler on the prices of Bitcoin and Dogecoin, but also their impact on the number of tweets on these assets and investor sentiment.
Before we dive into the data, let’s define two indicators: the number of tweets and the TIE’s Daily Sentiment Score.
Number of Tweets: The number of tweets about a single cryptocurrency in 24 hours.
Daily sentiment score: A measure of the positive or negative conversations about a particular currency on Twitter in the past 24 hours and the previous 20 days. A score higher than 50 means more positive conversations in the past 24 hours and 20 days, while a score lower than 50 is more negative.
All the triple-stacked charts below evaluate the price performance, sentiment score changes, and the number of tweets from 6 hours before the tweet is published to 24 hours after it is published.
Elon Musk’s Bitcoin tweet
First, let’s take a look at the Bitcoin price and tweet volume chart, with Musk’s tweets superimposed on it. We can quickly see that we can quickly see that most of his tweets were posted in recent weeks because the price of BTC has fallen from $60,000 to $40,000.
The following table shows all of Musk’s tweets related to Bitcoin, as well as some additional statistics, such as 24 hours/maximum/minimum return, tweet volume changes, and mood changes. These tweets included topics such as Tesla’s acceptance of BTC payments, conversations with miners, and emoticons.
Despite the positive impact on investor sentiment (23.5%) and the number of tweets (44.4%), Elon Musk’s Bitcoin-related tweets had an average impact of -1.6% per tweet on the price of BTC .
Let’s take a look at some of Musk’s most influential tweets.
Tesla started accepting Bitcoin payments
In addition to changing his resume to the word Bitcoin, Musk’s Twitter frenzy really started when Tesla announced that it would accept Bitcoin as a payment for Tesla’s vehicles. After the announcement, the price of BTC immediately surged, reaching a peak return of 4.3% within 7 hours, and then fell below the price before the announcement. Not only has the number of tweets about Bitcoin increased by 25% in 24 hours, but the tone of the conversation (investor sentiment) has become more and more positive, as TIE’s daily sentiment score has increased from 42 (negative) to 75 (positive) , An increase of 87%.
Tesla suspends Bitcoin payments
Conversely, when Tesla suspended Bitcoin payments due to Musk’s concerns about the energy use of miners, the price of BTC dropped sharply. BTC fell by 13% within a few hours, then consolidated and moved sideways. In the next 24 hours, investor sentiment dropped from 43 (low) to 21 (very low), and the number of tweets increased from 52,000 to 130,000, an increase of 150%.
“Bitcoin is highly centralized and controlled by large miners”
Another bearish example is when Musk tweeted that Bitcoin is highly concentrated and controlled by large miners. As sentiment fell from positive to negative in the next few hours, this caused the price of BTC to drop by 10%. . The conversation on Twitter surged by 75% in 24 hours.
Even a simple emoji from Musk’s Twitter account can lead the market in a new direction.
Immediately after the release of this meme, the price of BTC dropped by 3%, and finally dropped by 8% within 24 hours. Investor sentiment has once again turned from positive to negative.
Tesla will resume Bitcoin payments when miners’ clean energy usage reaches 50%
A recent tweet by Elon that has a positive impact on the market is that he announced that Tesla will resume Bitcoin payments when miners use about 50% of clean energy. Within 3 hours, the price of BTC rose by 5%, and then continued to rise by 10% within 24 hours. The number of tweets has increased by 20%, and investor sentiment remains positive.
Michael Sayler and Bitcoin
Now let’s take a look at Michael Saylor’s tweets about Bitcoin. When all of Sailer’s tweets are plotted above the Bitcoin price, we can see that most of his tweets were during the period when Bitcoin rose from $11,000 to $60,000. Most of Saylor’s tweets are presented in a positive way, whether it’s a post announcing MicroStrategy’s new purchase of BTC, or his promotion of the entire asset.
Within 24 hours of Thaler’s tweet, the average return of BTC was 2.2%. In addition, investor sentiment (-0.8%) and the volume of tweets (4.1%) are usually positively affected.
Most of Saylor’s tweets are announcements of MicroStrategy’s purchase of BTC. Here are some examples of these announcements.
We can see that in a short period of time, the price usually has a jump, and even changes the mood from positive to negative.
Interview with Musk and Bitcoin Miners
A noteworthy tweet that had a negative impact on Bitcoin was the meeting where Celler discussed energy use with Musk and miners. Within 24 hours of this tweet, the price of BTC dropped by 13%, and investor sentiment changed from 75 (positive) to 34 (negative).
Musk and Dogecoin
So far, the most influential tweet in this research is Musk’s Doge tweet. Almost all of these tweets are presented in a positive way.
“One word: Doge”
As early as 2020, after Musk issued a simple tweet “One word: Doge”, the price of DOGE soared by 40% within 24 hours. After this crazy price fluctuation, sentiment rose by 58% as TIE’s daily sentiment score soared from 61 to 95.
“There are no highs, no lows, only Doge”
Another tweet from Musk made DOGE’s price rise. His tweet was “No highs, no lows, only Doge”. Not only did Dogecoin’s price increase by 40% in a few hours, but Dogecoin’s tweets also surged by 117%.
Doge emoji pack
A simple emoji from Musk made DOGE’s price soar by 125%. This is his most influential tweet to date.
SpaceX will launch satellite Doge-1 to the moon
One of the tweets that had the most significant negative impact on Dogecoin came from SpaceX accepting Dogecoin as payment to launch a DOGE-1 satellite mission to the moon. Although the tone of the conversation on Twitter (investor sentiment) rose from negative to positive, the price of Dogecoin dropped by 24% in 24 hours.
Collaborate with Doge developers
Musk even stated on Twitter that he is working with the developers of Dogecoin to improve the efficiency of system transactions. The market value of DOGE has increased by more than 10 billion U.S. dollars in a few hours, and the price of DOGE has risen by nearly 40%. In the 24 hours after Twitter was released, investor sentiment became more and more positive.
The average influence of each tweet by Elon Musk and Michael Saylor
The following three graphs show the average return, sentiment changes, and the number of tweets for each tweet by Musk and Michael Saylor. On average, within 24 hours of Musk’s Bitcoin tweet, the return rate for Bitcoin is -1.6%, and the return rate for Saylor’s tweet is 0.2%. The most influential tweets are Musk’s tweets related to Dogecoin, with an average 24-hour return rate of 8.4%.
Musk’s tweets had a positive impact on investor sentiment towards Bitcoin and Dogecoin. Although most of Michael Saylor’s tweets were relatively positive, investor sentiment towards Bitcoin dropped by an average of -0.8% after his tweet was published.
Twitter activity around Bitcoin and Dogecoin usually increases within 24 hours of Musk and Sailer’s tweets. On average, Doge’s traffic per tweet surged by 99.7%.
The data tells us that Musk and Michael Saylor’s tweets did affect Bitcoin and Dogecoin. Their tweets sparked social conversation on Twitter and led to more tweets about these two assets. In addition, they even seem to usually affect investor sentiment.
These short-term price fluctuations combined with social conversations have brought trading opportunities in both directions. Interestingly, the response time of each tweet seems to be accelerating, as it has become a wider impact. Although these opportunities may be profitable, investors should be cautious not to try to profit from tweets, because normally, the prices of Bitcoin and DOGE will fall back after their tweets are fueled.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/a-review-of-the-influence-of-musk-and-thalers-tweets-how-scumbags-and-big-gamblers-disrupted-the-crypto-market/
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