Crypto enthusiasts are already aware that their superhero, Elon Musk, is a major proponent of Dogecoin and cryptocurrencies as a whole. Recently, however, the memecoin has begun losing popularity as a new coin, called Shiba Inu coin, has rolled onto platforms. Once rumors broke out that the upcoming coin would be available on the Robinhood exchange, traders rushed to swap their Doge for Shiba.
But it looks like Elon Musk is back on Twitter to bring back the hype surrounding Dogecoin. On Sunday, the Tesla CEO made a single tweet that caused Shiba Inu Coin prices to plunge. When fans asked him how many Shiba Inu coins he owns, he merely said ‘none.’
His one-word reply was enough to cause the world’s most inexpensive cryptocurrency to lose its value. Shiba Inu coins’ value dropped by a whopping 20 percent. This tweet was a wake-up call for crypto fans on Twitter that Elon Musk can cause cryptocurrencies to surge or sink.
The question for Musk came from a Twitter account called @ShibaInuHodler, who asked how much SHIB coin the conglomerate holds. After making his reply, the price plummeted. Fortunately, it managed to recover on Monday, so it was only down by 11 percent compared to the pre-tweet price.
This is a good reminder of the time when Elon Musk was able to send crypto fans flooding to buy Dogecoin. Just a few tweets and statements by him at a conference were able to increase the meme coins popularity immensely. However, it also points to a dangerous side of influencer-like culture, wherein Elon Musk is an influencer for crypto fans.
Considering how crypto prices can take such a hit (or rise to new heights) because of a tweet by a conglomerate, investors need to be careful. The cryptocurrency market is already volatile as it is, so prices depending upon tweets can make things much more unstable. More especially, traders should be careful when investing in memecoins such as SHIB.
Sure, you can manage to make a huge return on your investment, but it can also be dangerous. It’s possible that a tweet by Elon Musk or some other crypto-proponent conglomerate can send prices tumbling down. Of course, if you end up investing in their preferred coins, then things can turn out in your favor as well.
While the recent twee-related plunge may have put a grinding halt to Shiba Inu coin’s latest rally, the digital currency has been rising steadily. The cryptocurrency is what it claims to be a ‘Dogecoin killer.’ The vision of the developers was to be the Ethereum-network token that would effectively replace Dogecoin. Compared to flagship cryptocurrency Bitcoin, which are scarce, SHIB tokens have a large supply of 1 quadrillion, making them practically abundant.