Media
A new study sheds light on the connection between Elon Musk tweets and the tide and flow of cryptocurrency markets. In the study carried out by the Blockchain Research Lab (Blockchain Research Lab / BRL), six tweets of the billionaire technology entrepreneur Musk about Bitcoin and Dogecoin were analyzed.
The results pointed out that Musk's tweets could have an immediate and significant impact on the markets. According to the study, the key to how big the impact of each tweet will be depends on whether Musk is reacting to an activity currently taking place in the market, or whether he suddenly shares his opinion independently.
When Twitter activity related to cryptocurrency is not linked to previous market activities; the effect is getting much bigger. For example, within three hours of Twitter changing its bio to include only the word "Bitcoin", the price of BTC increased from $ 32,000 to over $ 38,000. This resulted in a cumulative abnormal return (CAR) increase of 18.99% within 7 hours.
The tweet taken when the crypto money market is active is not more effective
Similarly, Musk's tweet containing only the word "Doge" caused the average transaction volume to increase from 9 transactions per minute to 775 transactions in 30 minutes. The research report includes the following statements:
All the results presented show that individual tweets can have a significant impact on the returns and transaction volumes of cryptocurrencies.
While Elon Musk can be an extreme example of influencing through social media; There are relatively few influential individuals, groups or companies that communicate their views on cryptocurrencies through social media. A systematic classification of key figures in terms of their short-term impact on cryptocurrencies could represent a promising research approach.
According to the BRL researchers, the other four tweets analyzed in the study were possible responses to previous market activities. Therefore, it did not produce such significant results.
The text on this page is based on the original post and does not claim the copyright of the owner in any way. Everything written here is a free interpretation of the original post.