Yesterday (October 27), Elon Musk delivered a speech at a town hall meeting in Lancaster, Pennsylvania, expressing his support for Trump and encouraging supporters to vote early in key swing states. Musk has publicly supported Trump multiple times during the election period, which is seen as a positive signal for the cryptocurrency market. Will the Musk effect manifest again?

Musk Effect

The "Musk Effect" in the cryptocurrency market refers to the significant impact that Elon Musk's statements and actions on social media, particularly on Twitter, have on the cryptocurrency market. This effect is reflected in his support or criticism of specific cryptocurrencies like Bitcoin and Dogecoin, as well as his ability to influence overall market sentiment and price fluctuations.

Image source: Internet

For example, after he changed his Twitter bio to "#bitcoin" in January 2021, the price of Bitcoin surged from about $32,000 to over $38,000 within hours, adding $111 billion to the asset's market value.

A similar incident occurred when Musk tweeted "One word: Doge," which led to a significant abnormal return (CAR) of 8.17% for Dogecoin within five minutes of the tweet, peaking at 17.31% within an hour.

Musk's Speech Supporting Trump

Elon Musk's support for Trump is particularly evident in the 2024 U.S. presidential election. His supportive actions have been frequent during the election period, and on October 27, he publicly endorsed Trump again at the town hall meeting in Lancaster, Pennsylvania, encouraging supporters to vote early in critical swing states.

These actions demonstrate his comprehensive support for Trump's campaign, from funding to social media influence, and even personal involvement in campaign activities. His statements and actions undoubtedly have a positive impact on Trump's campaign and, to some extent, increase Trump's chances of winning.

Yesterday's public statement also reignited volatility in the cryptocurrency market. If Trump, who supports the cryptocurrency market, successfully runs for office again, it would be seen as a significant positive signal for the crypto market, especially impacting traditional cryptocurrency BTC more significantly. This has led market observers to speculate whether the "Musk Effect" will reappear on this political stage. According to the latest data from AICoin, BTC is currently valued at $67,850, and the candlestick chart shows a slight upward trend for BTC since the 27th.

Image source: AICoin

Musk's recent actions and statements have positively influenced Trump's campaign and may also impact the cryptocurrency market. Market participants may view Musk's actions as a positive signal for the cryptocurrency market, thereby affecting market sentiment and price fluctuations. The Musk effect may manifest again, influencing the trends in the cryptocurrency market. We need to continue monitoring the movements of Musk and Trump.

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