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Sunday, January 23, 2022

Elon Musk was trapped with his new tweet on Web3

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Elon Musk’s tweets usually drive the cryptocurrency market up, but this time things turned out differently.

What happened ?
Being decentralized, and therefore outside the competence of regulators, the cryptocurrency market is particularly conducive to nervous breakdowns. In other words, short-term sentiment determines a significant portion of the income investors receive. And in general, it is difficult to predict which event will push the price movement upward or on the contrary bring the cryptocurrency back down from its heights. So far, most of the money has flowed in the direction of this sentiment.

However, Elon Musk’s recent tweet, in which he addressed the Web3 community, seems to have struck a chord.

Early on Saturday morning, the cryptocurrency market fell unexpectedly: most of the major cryptocurrencies collapsed like no one expected.

This event did not spare major Web3 cryptocurrencies, such as Polkadot (DOT), Filecoin (FIL) and Kusama (KSM). Around the evening of December 3, each of these tokens had dropped by more than 10%.

Musk reaction
Elon Musk’s Twitter account currently has over 65 million followers. Although Tesla CEO claims he doesn’t advertise, you could argue that social media has provided more than enough publicity for the richest man in the world: his social media admirers literally know it all. about him and his business.

This year, on social media, Musk is paying a lot of attention to the world of cryptocurrency. His previous tweets led cryptocurrency Dogecoin and Shiba Inu to appear in the top 10 cryptocurrency by market capitalization. And they stayed there until the recent fall.

This latest attack on Web3 users, which contrasts so strongly with his previous tweets, was therefore so unexpected. After all, it seemed like Musk still supported the crypto movement (at least in the cryptocurrency space).

What does all this mean?
As fool.com writes, it is debatable whether Elon Musk is on a tightrope with his tweets influencing the market. Perhaps he is simply defending his right to free speech.

And it cannot be said to what extent his tweets affected the value of Web3 cryptocurrencies. After all, many large cryptocurrencies have fallen much lower than Polkadot, Filecoin, and Kusama.

However, the fact that Musk is attacking Web3 cryptocurrency while protecting “dog-sourced” cryptocurrency can be very dangerous for investors.

Either way, the decision is up to buyers: treat Musk’s recent tweets either as a chain of unrelated events or as speculative buying opportunities. Suppose he is not trying to actively manipulate the prices of cryptoassets.

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