KUALA LUMPUR, MALAYSIA –
Media OutReach Newswire – 25 February 2025 – Over the past few years, the strategic endorsements, enigmatic tweets, and business manoeuvres of Elon Musk have caused shock waves in the cryptocurrency market with wild price fluctuations. Today, he is creating a native cryptocurrency on the X platform under the temporary name,
X Money.
Source: Shutterstock
When and if it happens, the project can turn X (ex. Twitter) into a complete financial system, making Musk an overnight competitor for traditional banking systems as well as traditional crypto payment systems. Others believe this could be an attempt by Musk to create a decentralised alternative to PayPal and traditional fintech platforms, counting on X’s massive user base to drive its uptake. Kar Yong Ang, a financial market analyst at Octa Broker, elaborates: Will X Money be the disruptive force that reshapes digital finance, or just another speculative experiment.
The Musk factor
When Elon Musk set his sights on Dogecoin, the market took notice. His influence became undeniable when a single tweet sent the price soaring. In December 2020, a seemingly casual tweet,
‘One word: Doge’, triggered a
20% price surge within hours.
By May 2021, following Musk’s
Saturday Night Live appearance, Dogecoin had
skyrocketed to $0.73, marking an astronomical rise of over 10,000% from the previous year. However, the euphoria was short-lived, as Musk jokingly
referred to Dogecoin as a ‘hustle’ on national television, prompting an immediate crash. The cycle repeated as Musk continued to tease integrations with
Tesla,
Twitter (now X), and even
SpaceX. Each hint of Dogecoin adoption sent waves through the market, illustrating an unprecedented case of social media-driven price manipulation.
Market impact analysis: price movement correlation
A
close look at the price movement of Dogecoin shows an unavoidable connection between Musk’s interest and its price. Between December 2020 and May 2021, Dogecoin pumped from $0.003 to its all-time high, over 24,000%. The next year, as Musk’s attention turned elsewhere, it fell by 90%, showing its speculative volatility. When Musk floated the idea of accepting Dogecoin payments on Twitter in early 2023, its price jumped 30% in a day, indicating his influence had not diminished.
The broader crypto market, on the other hand, tended to mirror Dogecoin’s peaks and valleys, highlighting Musk’s broader sway. When Tesla announced that it would no longer accept Bitcoin due to environmental concerns, the entire market tanked, with Dogecoin
shedding 40% of its value in a matter of days.
Dogecoin is not the only Musk-linked token to experience extreme price swings. The rise of Musk-inspired coins, such as ElonCoin, MuskSwap, and even parody tokens like Dogelon Mars, has followed a similar trajectory. In 2021, Dogelon Mars ($ELON)
surged 4,000% in under a month, fueled by speculation that Musk would support it. Similarly, Musk’s offhand social media posts have caused ElonCoin to spike over 600% in a single week before rapidly retracing. Musk’s mere association with crypto—whether intentional or not—creates instant market distortions.
Legal and regulatory implications
Musk’s market-shaping tweets
have not gone unnoticed by regulators. In 2022, a class-action lawsuit alleged that he had engaged in deliberate market manipulation, artificially inflating Dogecoin’s price before selling off at a profit. While Musk dismissed the case as frivolous, regulatory bodies, particularly the SEC, have intensified their scrutiny of influencer-driven market movements.
‘If the lawsuit succeeds, it could set a precedent for greater oversight in cryptocurrency markets, potentially curbing speculative hype cycles‘, Kar Yong Ang explains.
‘Such intervention could reshape the industry, making it less susceptible to manipulation but also reducing the high-risk, high-reward nature that attracts many traders’, concludes the expert.
Future Outlook: Market Predictions
The broader ‘Musk Effect’ continues to fuel speculative hysteria in the crypto markets. The effect is not limited to Musk’s own initiatives: coins tied to his public persona, family, and even unrelated memes tend to experience parabolic price appreciation.
Most recently,
Trump and Melania-themed memecoins have introduced a fresh wave of speculative trading. Meanwhile, Musk himself still indirectly impacts the memecoin universe. His recent internet antics, such as rebranding himself ‘Harry Bōlz’ on X, coincided with a
$28 million trading volume spike in niche tokens, demonstrating how market volatility triggers can stem from seemingly trivial events.
Investment considerations and risk assessment
With Musk potentially entering the cryptocurrency market directly through X Money, the landscape could shift dramatically. Unlike Dogecoin, which remains largely speculative and community-driven, a Musk-backed financial token could introduce tangible use cases, particularly within X’s expanding payment ecosystem.
Key risk factors for investors include:
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Regulatory uncertainty: authorities are closely monitoring Musk’s financial ventures, and any potential legal challenges could impact X Money’s development.
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Market volatility: If history is any indication, Musk’s crypto projects tend to cause significant market swings, benefiting early adopters but posing risks for those entering peak hype cycles.
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Adoption challenges: For X Money to succeed, it must offer compelling advantages over existing payment solutions like PayPal and USDC-backed stablecoins. Its adoption will depend on how well it integrates with financial services within the X platform.
Despite these risks, the possibility of Musk disrupting the digital payments space cannot be overlooked. If X Money launches successfully, it could become a dominant force in fintech, further cementing Musk’s influence over global markets.
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Disclaimer: Trading involves risks and may not be suitable for all investors. Use your expertise wisely and evaluate all associated risks before making an investment decision.
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