Elon Musk Manipulates Market Through Memes on X

Elon Musk posts have shown that a single tweet can translate into billions of dollars in market movement from the stock market to cryptocurrency. Recently, Musk shared an AI generated video on X depicting his dog wearing business attire and declaring that "Flōki is back on the job as 𝕏 CEO!"

The impact on the memecoin named after the dog, Floki (FLOKI), was instant and dramatic. The token’s price surged by nearly 29% in the hours following the post, proving the enduring power of Musk's digital celebrity. Trading volume for FLOKI shot up by over 800% in the 24 hours after the tweet, as speculative traders piled in to capitalize on the hype.

While Musk has claimed his posts are made "in a joking way" and not meant as financial advice, the consequences for investors are anything but funny.

DOGE Coin is one of the cryptocurrencies at the center of Musk's posts.

Market Manipulation Rising With Stocks

However, Musk's influence isn't limited to joke coins. In February 2021, he drove the world's largest cryptocurrency, Bitcoin, to a new high. He did this by announcing that his company, Tesla, had purchased $1.5 billion worth of Bitcoin and would begin accepting it as payment. Just three months later, he sent the market into a panic by reversing course. Citing environmental concerns over Bitcoin mining, Musk tweeted that Tesla had suspended vehicle purchases using the coin, a move that wiped billions off the crypto's value

On another notable occasion, just by simply changing his Twitter bio to include the hashtag #bitcoin, caused BTC's price to surge from around $32,000 to about $37,000 in a matter of hours.

His posts have also caused problems in the stock market. In 2018, he shocked Wall Street by tweeting that he was considering taking Tesla private at $420 a share and had "funding secured." Tesla's stock shot up. The problem was, the funding was not secured. The U.S. Securities and Exchange Commission (SEC) sued Musk for securities fraud. The case was settled with Musk and Tesla each paying $20 million in fines, and Musk agreeing to have his company-related tweets reviewed by a lawyer.

Cryptocurrency as the Wild West

In the heavily regulated stock market, Musk's actions earn him a fine. But in the cryptocurrency world, which largely operates like a digital "Wild West" with few rules, his posts go unchecked.

Critics argue that Musk’s posts are a form of market manipulation. Professional trading firms can use high-speed bots to buy or sell based on his tweets in milliseconds, long before a normal person can even react. This often leaves average retail investors—many of whom follow Musk's posts as financial advice—holding worthless bags when the bubble he creates bursts.