Study: Elon Musk Crypto Tweets Lead to Abnormal Returns

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In Brief
  • A study carried out by Blockchain Research Labs suggests Elon Musk's cryptocurrency tweets lead to abnormal returns for Bitcoin (BTC) and Dogecoin (DOGE).

  • The study points out the significant impact that famous people have on crypto.

  • As the market matures, the impact of such people may weaken.

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A working paper published by Blockchain Research Lab says Elon Musk’s cryptocurrency tweets create “significantly abnormal returns” for Bitcoin (BTC) and Dogecoin (DOGE).



The Elon Musk Effect

The paper evaluates the six most recent cryptocurrency-related tweets the Tesla CEO posted and their effect on both Bitcoin and Dogecoin.

It found that after Musk changed his Twitter bio to “#bitcoin,” BTC’s price posted a cumulative abnormal return (CAR) of 6.31% in 30 minutes. This increased to 13.19% after an hour, reaching a height of 19% over seven hours.



The study investigated the effect of Musk’s one-word DOGE-related tweet in December, finding an impact on the meme coin’s CAR of 8.17 % in just five minutes. This figure peaked at 17.31% after an 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 volume had already significantly increased, 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 on blockchain technology.” It conducts regular research into areas in the cryptocurrency and blockchain industry.

Famous People in Crypto

Nevertheless, the study concludes that tweets from individuals in the public eye can significantly affect the cryptocurrency market. Those who have been in crypto long enough know all too well the effect that celebrities have.

In 2017, Potcoin jumped nearly 100% in under 24 hours after a strange endorsement from famous basketballer Dennis Rodman. More recently, Decentralized Finance project Aave (AAVE) saw its token soar in value after investor Mark Cuban announced it as part of his portfolio. AAVE currently trades at around $500.

Moreover, famed Apple co-founder Steve Wozniak entered the cryptocurrency industry last year with a platform to securitize clean energy projects. Its native token, WOZX, initially priced at $1.50, doubled in just a single day, almost entirely due to Wozniak’s involvement. WOZX now trades at $1.17.

Will This Last?

The question remains, how impactful will the celebrity effect be on the price of cryptocurrencies in the future?

It’s worth noting that Musk is the richest man in the world. It’s likely, as the BRL study suggests, that he is an extreme example. Several celebrities publicly support cryptocurrencies, and they no longer have the effect Rodman had.

Moreover, there is a danger that such effects could lead to market manipulation. For the moment, however, one thing we do know is that celebrities can move markets. And Elon is chief among them.


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Emmanuel entered the cryptocurrency space in 2013 as a cryptocurrency broker. He is a crypto-enthusiast, entrepreneur, and investor, who has built and led several projects and communities in the space. He is CEO and co-founder of Provence Intelligence, a boutique crypto-consultancy firm that aims to bridge the gap between the cryptocurrency and DLT space and the traditional world. Interests include DeFi, non-blockchain DLTs, and the synthetic derivatives space.

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