• Elon Musk recently tweeted about Milady NFTs, which caused their prices to spike fourfold in a short amount of time.
• After the tweet, the prices of the NFTs have quickly retracted and are now back at their pre-tweet levels.
• Musk has warned people not to bet “the farm” on Dogecoin and other investments, indicating that these pumps don’t make for wise long-term investments.
The Elon Musk Effect
The infamous ‚Elon Musk effect‘ recently hit the world of Non-Fungible Tokens (NFTs). A Tweet from the Tesla CEO featuring a meme with the Milady Maker avatar sent the price of Milady NFTs quadrupling in a matter of minutes.
Pump and Dump
Following Musk’s tweet, which was posted on May 10th, 2021, an otherwise obscure set of NFTs saw its price spike as much as 400%. At their peak, these tokens were trading around $13,700 worth of ETH each. Additionally, LADYS token also got caught up in this pump and saw its market capitalization surge over 1,100 percent to reach over $120 million.
Price Retraction
However, as expected, this hype was short-lived and prices for these tokens are back where they were prior to Musk’s involvement. OpenSea is currently showing the price per token drop as low as 3.2 ETH – lower than before the Tweet – likely due to holders selling off their artwork for a handsome sum and taking profits thereafter driving down prices again.
Musk’s Warnings
Musk has been known to be a big supporter of Dogecoin however he has warned people against betting „the farm“ on it or other crypto assets. This serves as an indication that going fully into any coin or asset based on his influence alone would be dangerous when it comes to long term investments.
Conclusion
The Elon Musk effect is well known within crypto circles but investors should use caution when following his lead into any investment opportunities; especially those based solely on his Tweets alone without doing additional research first.
