Lately, two prominent figures have had their way with the cryptocurrency markets via their Twitter activity; Elon Musk and Michael Saylor. Let’s analyze the impact of their tweets in relation to crypto prices.
This piece is an excerpt from The TIE & @eToroUS Q2 Report. To see the full research report, head over to https://www.etoro.com/en-us/crypto/quarterly-report/
Cryptocurrency markets are predominantly driven by investor sentiment, with most of the social conversations starting on Twitter. Over the years we have seen several trends and events on Twitter that have impacted crypto prices, and lately two prominent figures have had their way with the cryptocurrency markets via their Twitter activity; Elon Musk and Michael Saylor. With Musk’s 57.6M followers and Saylor’s 1.3M, it’s fair to say that their tweets get a lot of attention online. In fact, they get enough attention to impact the prices of digital assets. A prime example of this is when Elon Musk simply changed his Twitter bio to the word Bitcoin and sent the price of BTC upwards of 20% within a few hours.
In this study, we will look at not only the impact that Elon Musk and Michael Saylor have had on the price of Bitcoin and Dogecoin, but also their impact on tweet volume and investor sentiment on these assets.
Before we dive into the numbers, let us define two metrics, Tweet Volume and The TIE’s Daily Sentiment Score.
Tweet Volume: The number of tweets about an individual cryptocurrency over 24hrs.
Daily Sentiment Score: A measure of how positive or negative conversations on Twitter have been about a particular coin over the last 24 hours vs. the previous 20 days. A score above 50 implies that conversations have been more positive over the last 24 hours vs. the last 20 days, and for scores below 50, more negative.
All triple stacked charts below evaluate the price performance, sentiment score change, and tweet volume change starting from 6 hours before the tweet is published up until 24hrs afterwards.
Elon Musk Bitcoin Tweets
First let’s start by looking at a chart of Bitcoin price vs tweet volume with Elon’s tweets overlaid on top. We can quickly see that the majority of his tweets have been in recent weeks as the price of BTC has trended down from $60k to $40k.
The table below shows all of Musk’s tweets that are related to Bitcoin, with some additional stats such as 24hr/Max/Min returns, tweet volume change, and sentiment change. These tweets include topics such as Tesla’s acceptance of BTC payments, talks with miners, memes, and more.
Elon Musk’s Bitcoin related tweets have impacted the price of BTC by -1.6% per tweet on average, despite positively impacting investor sentiment (23.5%) and tweet volume (44.4%).
Let’s take a look at some of the most impactful tweets from Elon Musk.
Tesla Starts Accepting Bitcoin Payments
Aside from changing his bio to the word Bitcoin, the start of Elon’s tweet frenzy really began once Tesla announced that it had started accepting Bitcoin payments for their vehicles. The price of BTC immediately surged higher after this announcement, reaching a peak return of 4.3% within 7 hours before falling back down below pre-announcement prices. Not only did the number of tweets about Bitcoin increase by 25% in 24 hours, but the conversational tone (investor sentiment) became increasingly more positive, as The TIE’s Daily Sentiment Score increased by 87% from 42 (negative) to 75 (positive).
Tesla Suspends Bitcoin Payments
On the flipside, once Tesla suspended Bitcoin payments due to Elon’s concerns about the energy usage from miners, the price of BTC sold off hard. BTC dropped -13% within a few hours before consolidating and trending sideways. Investor sentiment decreased from 43 (low) to 21 (very low) over the next 24hrs, with tweet volume increasing by 150% from 52k to 130k.
“Bitcoin is highly centralized and controlled by big miners”
Another bearish example is when Elon tweeted out that Bitcoin is highly centralized and controlled by big miners. This sent the price of BTC downwards by -10% as sentiment dropped from positive to negative over the next few hours. Twitter conversations surged by 75% in 24hrs.
Even a simple meme from Elon’s account can send the market in a new direction.
Immediately after this meme was posted, the price of BTC dropped 3%, eventually falling 8% within the 24hr period. Investor sentiment once again went from being positive to negative.
Tesla Will Resume Bitcoin Payments When ~50% Clean Energy Usage by Miners
The most recent tweet from Elon that impacted the market in a positive manner was when he announced that Tesla would resume Bitcoin payments when there is ~50% clean energy usage by miners. Within 3 hours the price of BTC had surged by 5% before continuing to trend higher by 10% over the 24hr period. Investor sentiment remained positive as tweet volume increased by 20%.
Michael Saylor — Bitcoin
Now let’s look at Michael Saylor’s tweets regarding Bitcoin. When plotting all of Saylor’s tweets on top of Bitcoin price, we can see that the majority of his tweets were during BTC’s run up from $11k to $60k. Most of Saylor’s tweets are presented in a positive manner, whether it’s a post announcing MicroStrategy’s new BTC purchase or just him promoting the asset as a whole.
BTC has seen a 2.2% return on average over the 24hr period after Michael Saylor’s tweets. Additionally, investor sentiment (-0.8%) and tweet volume (4.1%) are typically impacted positively.
Most of Saylor’s tweets are announcements of MicroStrategy’s BTC purchases. Below are a few examples of these announcements.
We can see that there is typically a jump in price for a short period of time, even shifting sentiment from positive to negative.
Meeting with Elon Musk and BTC Miners
One notable tweet that had a negative impact on Bitcoin was Michael Saylor’s meeting with Elon Musk and miners to discuss energy usage. Within 24hrs after this tweet, the price of BTC fell 13%, with investor sentiment shifting from 75 (positive) to 34 (negative).
Elon Musk — Dogecoin
By far the most impactful tweets in this study are Elon Musk’s Doge tweets. Almost all of these tweets are presented in a positive manner.
“One Word: Doge”
Back in 2020, after Elon sent out a simple tweet stating “One Word: Doge”, the price of DOGE surged by 40% within 24hrs. This wild price swing was followed by a 58% sentiment increase, as The TIE’s Daily Sentiment Score soared from 61 to 95.
“No highs, no lows, only Doge”
Another cheeky tweet from Elon that sent the price of DOGE upwards was his tweet “No highs, no lows, only Doge”. Not only did the price increase by 40% within a few hours, Dogecoin tweet volume surged by 117%.
A simple meme from Elon Musk sent the price of DOGE surging by 125%. This has been the most impactful tweet for him so far.
SpaceX to Launch Satellite Doge-1 to the Moon
One of the most notable negative impacting tweets comes from when SpaceX accepted Dogecoin as payment to launch a DOGE-1 satellite mission to the moon. Dogecoin saw its price decrease by 24% within 24hrs, despite the conversational tone (investor sentiment) on Twitter increasing from negative to positive.
Working with Doge devs
Musk has even gone as far as to tweet that he is working with the Dogecoin developers to improve system transaction efficiency. DOGE’s market cap increased by over $10B within a few hours, sending the price of DOGE higher by nearly 40%. Investor sentiment became increasingly more positive over the 24hr period post-tweet.
Average Impact per Tweet by Elon Musk and Michael Saylor
The 3 charts below show the average return, sentiment change, and tweet volume change per tweet by Elon Musk and Michael Saylor. On average, Bitcoin has seen a -1.6% return within the 24hr period after Elon’s Bitcoin tweets are published and 0.2% after Saylor’s tweets. The most impactful tweets are Musk’s Dogecoin-related tweets, which bring in an average 24hr return of 8.4%.
Elon Musk tweets have a positive impact on investor sentiment on Bitcoin and Dogecoin. Despite the majority of Michael Saylor’s tweets being relatively positive, investor sentiment on Bitcoin has dropped by -0.8% on average after his tweets.
Twitter activity surrounding Bitcoin and Dogecoin typically increases within 24hrs after Elon Musk & Michael Saylor’s tweets. On average, Doge tweet volume has surged by 99.7% per tweet.
The data tells us that tweets from Elon Musk and Michael Saylor do actually impact Bitcoin and Dogecoin. Their tweets have sparked social conversations on Twitter and have led to more tweets being sent out about the two assets. Additionally, it even seems that they typically impact investor sentiment. These short-term volatile price swings paired with an influx of social conversations have presented trading opportunities in both directions. Interestingly enough, the response times to each tweet has seemed to speed up as it has become a more widely known effect. While these opportunities can be lucrative, investors should be cautious of trying to ride the back of the tweets as more often than not, the price of BTC and DOGE have retraced after their tweet fuel pumps.