The notoriously volatile world of NFTs was given a boost in the last month courtesy of none other than Elon Musk. The billionaire tech entrepreneur, known for his love of all things cutting-edge and digital, shook up the market with a single tweet – causing a skyrocket in the value of the Milady NFT collection. However, the surge proved temporary, as a recent market retraction saw the collection’s prices returning to their pre-Musk levels.
A Tweet Heard ‘Round the Market
The Milady NFT collection, until recently, experienced a rollercoaster ride in its market value. That was all thanks to Elon Musk‘s unexpected endorsement. Earlier in May, Musk, known globally not just for his role as the CEO of SpaceX and Tesla, but also for his active Twitter presence, shared an image of a Milady avatar. The avatar was adorned with the cryptic yet heartfelt message, “There is no meme, I love you.”
At the time, each NFT within the Milady collection was trading for approximately 3.4 ether. Musk’s digital endorsement almost instantaneously sparked a market frenzy, causing the value of each Milady NFT to surge by a staggering 200%. At the peak of this rally, the digital artwork fetched a significant sum of $13,700 worth of ether (ETH).
Meanwhile, the LADYS token, unrelated to the Milady collection, experienced an even more dramatic increase. Propelled by the market momentum, its value shot up by thousands of percent, ballooning its market capitalization to over $120 million.
The Inevitable Milady Market Retraction
Despite this rapid growth, the gains were not destined to last. OpenSea analytics data indicates that the Milady collection’s prices have since receded, returning to their pre-Musk tweet levels. This retraction saw the value of each NFT plummet to as low as 3.2 ether by Thursday.
Interestingly, this trend mirrors Dogecoin (DOGE), a cryptocurrency frequently beneficiary of Musk’s Twitter endorsements. However, while his tweets often lead to short-term price spikes, these gains tend to be fleeting, as traders and automated bots capitalize on Musk’s influence to turn a quick profit.
An Illustration of Influencer-Based Market Volatility
The Milady episode is a stark reminder of the dangers of relying on influencers, even those as powerful as Elon Musk, to drive market trends artificially. Such practices can result in temporary price inflation and an inevitable retraction, leaving late adopters nursing significant losses.
As such, it underscores the importance of sound investment strategies, founded on research and understanding, rather than following the whims of high-profile individuals.
Investors are urged to tread carefully and remember that the market often moves in cycles. While influencers can temporarily impact these cycles, they cannot fundamentally alter them.
Ultimately, the value of any asset, including NFTs, must be underpinned by tangible factors and not the fleeting interests of a prominent figure.