The effect of celebrity tweets on the cryptocurrency market has become a topic of study for researchers after a week in which Elon Musk triggered sizable price surges for both Bitcoin (BTC) and Dogecoin (DOGE).
Blockchain Research Lab published a paper on Jan. 3 titled, How Elon Musk’s Twitter activity moves cryptocurrency markets. The paper looks at six occasions when Elon Musk tweeted about cryptocurrency and attempts to measure the resultant impact on the trading volume and spot price of the coins in question.
“We investigate the impact of Elon Musk’s Twitter messages on cryptocurrency markets. By applying event study methodology, the impact of six Twitter events from 2020 and 2021 on return and trading volume of the mentioned cryptocurrency is analyzed,” the paper states.
Of the six tweets, four were related to Dogecoin and two were related to Bitcoin. The paper concludes that all six events had an impact on the trading activity of both cryptocurrencies, specifically their trade volume:
“Across all events, we identify significant increases in trading volume that are attributable to the events.”
The biggest impact the paper notes on Dogecoin came inTitle: Bitcoin’s Musk effect: Research shows how Elon moves cryptocurrency prices
Sourced From: cointelegraph.com/news/bitcoin-s-musk-effect-research-shows-how-elon-moves-cryptocurrency-prices
Published Date: Thu, 04 Feb 2021 10:50:48 +0000