Tesla CEO Elon Musk recently sent the cryptocurrency market on a roller coaster ride, and retail investors are now preparing for fluctuations with the help of Elon Alerts, an online platform that picks up Musk’s latest crypto comments.
Elon Alerts is a Korean website that sends messages via Telegram when Musk mentions cryptocurrencies on Twitter. Prices of dogecoin, bitcoin and other cryptocurrencies have fluctuated based on Musk's tweets, and the notifications serve as a signal for investors to brace for the wild ride that might follow.
The service also notifies subscribers if there are any notable media appearances by Musk, such as his Saturday Night Live appearance on May 8.
Elon Alerts only sends notifications via Telegram, but is planning on expanding the services to KakaoTalk and text message. The number of people subscribed to Elon Alerts has rapidly grown from only 500 a week ago, to over 6,800 on Tuesday.
The website is generating a range of opinions in Korea. Some say that it’s an interesting phenomenon, whereas some are pessimistic, arguing that it drives speculative investment.
“You assess a company’s potential when investing in its stocks but cryptocurrency purchases are more like gambling – it’s mostly done without thorough analysis and prices tend to shift just based on Elon Musk’s tweets,” said a 31-year-old office worker. “It’s sad because the younger generation is drawn towards virtual asset investments, thinking that living off of income is not enough.”
A 32-year-old freelancer, who said he has no interest in crypto trading, agreed.
“Even though the recent surge in house prices and increasing youth unemployment can be troubling, it’s strange that people want to earn easy money,” he said. “I believe that people become happy and motivated when they're given proper compensation by working.”
A 30-year-old retail investor had similar opinions. She claimed that Elon Musk is enjoying his influence on the cryptocurrency market with just one tweet, saying that it makes absolutely no sense that people make investment decisions based on the CEO's tweets.
“I don’t like investing in virtual assets because it’s impossible to assess the real value of cryptocurrencies, including bitcoin,” said Kim Jun-young, a finance YouTuber with 160,000 subscribers who goes by the channel name 4Real. “The fact that prices fluctuate on Musk’s tweets proves that it’s not a stable currency.”
Kim added that starting a service that notifies users of Musk’s cryptocurrency-related tweets means that everyone knows that Musk is the biggest cause of price fluctuations. Young Koreans know that using Musk’s tweets as an investment signal is speculative, but people follow because they don’t want to miss out on big money-making opportunities.
To eliminate crypto investment risks, providing necessary information for the traders is also important.
“We can’t stop crypto trading itself, but I think related institutions need to team up with financial authorities to provide necessary information to the investors,” said Kim Tae-gi, a professor at Dankook University’s Department of Economics. “A good example is Korea Financial Investment Association’s educational program, obliging all retail investors to listen to a mini lecture before short selling.”
The professor added that investors who raked in profit are the most vocal, but there are also people who lost a considerable sum of money. He emphasized that losses should be highlighted so people can make unbiased investment decisions.