A study by Blockchain Research Labs suggests that Elon Musk’s tweets about cryptocurrency lead to abnormal returns for Bitcoin (BTC) and Dogecoin (DOGE).
The study highlights the significant impact of famous people on cryptocurrency.
As the market matures, the impact of these people may weaken.
A document published by Blockchain Research Lab indicates that Elon Musk’s cryptocurrency tweets are creating abnormal returns on investment for Crypto Cash and Dogecoin (DOGE).
Dogecoin: The Elon Musk Effect
The document assesses the six most recent cryptocurrency-related tweets that the CEO of Tesla has posted and their effect on Bitcoin and Dogecoin .
There it is found that after Musk changed his Twitter bio to „#bitcoin“, the price of BTC displayed a cumulative abnormal return (CAR) of 6.31% in 30 minutes. This percentage rose to 13.19% after one hour, reaching a height of 19% in seven hours.
The study looked at the effect of Musk’s one-word tweet linked to DOGE in December, finding an 8.17% impact on the coin’s RCA in just five minutes. This figure peaked at 17.31% after one hour.
However, the study also points out that not all of Musk’s Tweets had a direct impact. The “Merry Christmas” tweet came after DOGE’s volume had already increased significantly, suggesting it was a response to market activity rather than the cause.
Blockchain Research Lab (BRL) is a non-profit organization „dedicated to independent science and research in blockchain technology“. He regularly conducts research in areas of the cryptocurrency and blockchain industry.
Famous People in Cryptocurrencies
Nonetheless, the study concludes that tweets from individuals in the public eye can significantly affect the dogecoin market. Those who have been in cryptocurrency for quite a long time are only too familiar with the effect celebrities have on this asset class.
In 2017, Potcoin jumped almost 100% in less than 24 hours after a strange endorsement from famous basketball player Dennis Rodman. More recently, the Aave Decentralized Finance Project (AAVE) saw its token skyrocket after investor Mark Cuban announced it as part of his portfolio. AAVE is currently trading at around $ 500.
Additionally, famed Apple co-founder Steve Wozniak entered the cryptocurrency industry last year with a platform to secure clean energy projects . Its native token, WOZX, initially priced at $ 1.50, doubled in a single day , almost entirely thanks to Wozniak’s involvement. WOZX is now trading at $ 1.17.