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Tesla TSLA CEO Elon Musk’s tweets affect cryptocurrency investors, per a recent Investing.com survey, which covered more than 1,100 respondents in the United States.
According to the survey results, of 30% of the investors that sold bitcoin in May, 20% attributed their decision to Musk’s criticism of the usage of fossil fuels to mine the digital currency and its impact on the environment.
Undoubtedly, Musk has been one of the proponents of cryptocurrencies through his support for bitcoin and dogecoin.
Musk was a bitcoin aficionado until the environment issue cropped up. Tesla’s $1.5-billion investment in bitcoin and its decision to accept the cryptocurrency as payment for its cars enhanced its prospects.
However, the environment issue prompted Tesla to reject bitcoins as payment for its cars in May. The EV giant is expected to resume transaction only if the currency’s mining is done using 50% of renewable energy.
Tesla’s ban along with the regulatory crackdown in China as well as a more hawkish Fed tone dealt a blow to bitcoin, which is currently down 46% from the year’s high of $64,829.14 hit on Apr 14.
The bitcoin collapse has also dragged down crypto-oriented stocks. Since Apr 14, Marathon Digital MARA and Riot Blockchain RIOT, both Zacks Rank #5 (Strong Sell) stocks, are down 25.8% and 24.6%, respectively.
Moreover, Coinbase COIN and MicroStrategy MSTR, both Zacks Rank #3 (Hold) stocks, are down 22.4% and 9.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Meanwhile, Musk continues to support Dogecoin through memes and tweets, thereby driving its price. The joke coin is currently up 5,221.36% year to date and 34.8% over the past week.
Will Musk’s Influence Wane as Crypto Market Matures?
Musk’s tweet over bitcoin’s excessive power consumption and usage of fossil fuels seems to have created a sense of environmental awareness among investors.
Markedly, 38% of the Investing.com survey respondents were previously ignorant of bitcoin mining’s negative impact on the environment. Moreover, 49% of the survey respondents now consider bitcoin’s environment unfriendliness an issue.
Further, Tesla and Musk’s focus on using green energy for mining has apparently influenced a majority of survey respondents, as 72% of investors now favor green cryptocurrencies like Ripple and Cardano.
However, Musk’s tweets have also been blamed for creating volatility in crypto prices. For instance, bitcoin’s price surged 19% after Musk changed his Twitter to ‘#bitcoin’ in January, this year.
According to the Investing.com survey, 58% respondents believe that Musk “has too much power” to manipulate cryptocurrency prices, while 12% stated that his influence makes them confident about investing in digital currencies.
However, it is expected that the Musk-effect will diminish as the cryptocurrency market matures and digital coins become mainstream. Per the Investing.com survey, 84% of investors don’t believe that the future of bitcoin centers around Musk.
Moreover, increasing regulations are expected to help reduce Musk’s influence over financial markets, including cryptocurrency.
Till then, Musk’s tweets will either be cheered or cribbed about by crypto investors but certainly not ignored.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
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Tesla, Inc. (TSLA) : Free Stock Analysis Report
MicroStrategy Incorporated (MSTR) : Free Stock Analysis Report
Marathon Digital Holdings, Inc. (MARA) : Free Stock Analysis Report
Riot Blockchain, Inc. (RIOT) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
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