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Elon Musk, Tesla and the rise-and-fall of Bitcoin

Elon Musk doing weird things on the internet shouldn’t come as a surprise, but his recent decision to stop accepting Bitcoin as Tesla payment has made some serious waves.

Considering the substantial amount of conversation we saw erupt online, we wanted to understand how Tesla’s decision impacted the discourse around Bitcoin. First, we used a social listening platform to pull tweets mentioning the word Bitcoin from before and after the Tesla announcement. Next, we created a time comparison using Relative Insight to understand how conservation has shifted. 

Our technology uses comparative analysis to uncover the unique words, phrases, grammar, topic and emotion seen from a particular written data set relative to another. This form of text analysis can help us understand the extent of Elon Musk and Tesla’s influence over Bitcoin and the cryptocurrency market. We analyzed nearly 3.5 million words, and here’s what we found:

Cryptocurrency discourse prior to Tesla’s announcement

Understanding the state of the conversation prior to the Tesla decision gives us a baseline reference point. During the before period, Bitcoin discussion was largely dominated by spam accounts looking to gain attention using buzzwords and hashtags

Organic mentions of Bitcoin centered around the cost with a high prevalence of topics including money and pay in addition to cost and price. Opinions were generally positive, with tweets mentioning words like good, best and great. Tweets discussing Bitcoin were also more likely to include other cryptocurrencies like Ethereum and Dogecoin, which shows us that the crypto conversation was not exclusively focused on Bitcoin.

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Monitoring responses to the Tesla Bitcoin decision

Tesla and Elon Musk dominated the Bitcoin conversation post-announcement. Mentions of Elon Musk and Tesla skyrocketed as the discussion shifted from general commentary on cryptocurrency to opinions on Tesla more specifically. While this might not be surprising, it confirms the impact and influence of Elon Musk on the Bitcoin market.

The Tesla decision sparked conversation around the impact of cryptocurrencies on the environment. We found increased use of the words environment, pollution and sustainability. In his announcement, Elon Musk cited concerns over the amount of energy needed to mine Bitcoin, much of which is coming from fossil fuels. While many Twitter users found this hypocritical coming from a man who builds rockets, but the decision highlighted the environmental impact of crypto and triggered important conversations.

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The overwhelming emotion we observed from Twitter users was stress. Post Tesla decision, our analysis found increased use of words like panic, worry and concern. Rightfully, this panic was rooted in the market crash. Immediately after the Tesla tweet, Bitcoin dropped from a daily high of £39,000 to £37,190. We observed this on Twitter through the use of the words crash and tank during this time.

Many believed this public announcement is a facade, giving Elon Musk the opportunity to intentionally impact the market and buy more Bitcoin at lower prices. In a further demonstration of his influence, days later Elon Musk announced that Tesla had not sold any Bitcoin during the crash – providing assurance to investors and boosting the market.

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Those who succumbed to the panic and sold their Bitcoin were called stupid, dumb and idiots. These words in addition to hypocrite were also used to describe Elon Musk. Many Twitter users disagreed with the Tesla decision, reverting to insults and mockery as opposed to constructive critiques.

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While some Bitcoin investors panicked, Twitter users found the whole situation quite funny. We saw increased use of words including funny, clowns and a myriad of laughing emojis. This use of humor goes hand in hand with name-calling, as both techniques attempt to minimize the importance or consequence of a situation.

As demonstrated by the price volatility, many Bitcoin investors are influenced by Elon Musk’s words and actions. The conversations we saw on Twitter laughed off the decision, leading us to believe those users were not financially invested in Bitcoin.

Regardless, it’s obvious Elon Musk holds power and influence over the cryptocurrency market and conversations around the topic online. Initial signs suggest this impact is not just a blip, as one week later Bitcoin is at its lowest price in nearly four months. Investors should be wary of the power a single person’s words can have on a global market.

Text analysis can be used in various ways across the financial industry, from analyzing the language of IPOs to tracking conversations on emerging trends such as GameStop or Bitcoin. The possibilities are endless! Request a demo to find out more. 

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