Elon Musk, who came to the agenda once again with his tweets that directly affect Bitcoin (BTC) and Dogecoin (DOGE) prices, also became the center of attention of researchers.
“How are Elon Musk’s Twitter messages moving the cryptocurrency markets?” published an article titled. The article aims to measure the impact of the coin on transaction volume and spot price when Elon Musk tweeted about cryptocurrencies.
The article states, “We are investigating the impact of Elon Musk’s Twitter messages on the cryptocurrency markets. By applying the incident investigation methodology, the impact of six Twitter messages in 2020 and 2021 on the price of the cryptocurrency and transaction volume is analyzed.”
Of the six tweets posted, four were about Dogecoin and two were about Bitcoin. The article shared the conclusion that all six messages have an impact on the price of both cryptocurrencies, and in particular the transaction volume:
“In all examples, we found significant increases in transaction volume after messages.”
The biggest impact on Dogecoin came right after Musk posted this tweet in December: “One word: Doge.”
Before the tweet, Dogecoin was traded nine times a minute, with an average trading volume of $ 1,942. Within 30 minutes of the tweet, the trading volume jumped to $ 299,330 per minute and the number of trades increased to 775.
Not every tweet sent by Musk has affected the price of Doge or Bitcoins, but the two generated significant “cumulative abnormal returns”. The following statement was made:
“Four of the Twitter activities were probably responses to previous market events. There was little or almost no price reaction. But the other two events were not a reaction. It appears to be independent actions that led to large increases in trading volumes, large and significant returns.”
SpaceX and Tesla CEO Musk’s biggest influence on Bitcoin came on January 29, when he added the word “Bitcoin” to his Twitter bio. As reported at the time, Bitcoin’s value increased within minutes of Musk’s Twitter profile update, and rose about 20 percent in the following hours.
As reported by Cointelegraph, the price jumped again after Elon Musk’s image shared about Dogecoin.