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The "Elon Musk Effect," a phenomenon that roiled the crypto ecosystem this year, when every little tweet from the Tesla boss could send token prices skyrocketing or plunging, seems to be losing its luster.
The billionaire has been a key driver of the volatility in bitcoin and dogecoin after announcing Tesla's $1.5 billion bitcoin bet and praising the meme-inspired asset's potential. More recently, his break-up with bitcoin dragged it back to values not seen since the start of the year.
But coming into the second half of 2021, Musk's influence doesn't seem that relevant any longer.
Musk tweeted in support of dogecoin on Thursday by saying "Release the Doge!" alongside a Godfather-inspired meme depicting actor Marlon Brando. The coin's price lifted slightly, but not as much as it would have a few months ago. For instance, dogecoin surged 20% in May when he ran a Twitter poll to ask whether people wanted Tesla to accept the token as payment.
Musk sent out another tweet on Friday with an image of a man on his laptop, seemingly laser-focused on dogecoin and the game Polytopia on the screen.
"It seems that investors are no longer listening and are finally realizing that the tweets of one man should not be the deciding factor for whether they buy or sell their assets," Alexandra Clark, sales trader at UK-based digital asset broker GlobalBlock, said on Friday.
Several investors have piled into dogecoin via trading app Robinhood, which on Thursday said the meme token accounted for 34% of its crypto revenue in the first-quarter this year. The company warned its business could be adversely affected if demand for the coin declines and isn't replaced by interest in other cryptocurrencies.
As of Friday, dogecoin's price has dropped about 65% to about 24 cents since its peak of 68 cents in May.
Critics have slammed Musk and his tweet storms for sending prices on a rollercoaster and allegedly manipulating the market. With millions investing in cryptocurrencies now, for one individual to have so much power in their hands is potentially dangerous, as it could encourage investors to make decisions based on minimal, or no research.
Ever since Musk's break-up with bitcoin, the world's most popular cryptocurrency has been going through somewhat of a lull. It didn't react much when the billionaire suggested a "promising" outcome of a bitcoin miners' discussion to make the asset more environmentally-friendly, or when he said Tesla would return to accepting it as payment when miners prove they're using 50% clean energy.
Bitcoin was last trading around $33,000 on Friday, down almost 50% from its peak in April. It's still up around 15% so far this year.
It gets hard for investors to make investment and balance the skills to be quick on the uptake to beat the crypto market amid a flow of information from one influential voice. But it seems likely that the crypto community may have grown tired with Musk's tweets, possibly making their influence fade away as just another passing fad.
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