A little-known cryptocurrency token called Starbase enjoyed a price surge on Tuesday after SpaceX CEO Elon Musk made an apparently unrelated Twitter post.
Musk, who is considered influential in the world of cryptocurrency, posted a photo of a sign that spelled out the word "Starbase" in glowing letters.
Musk did not elaborate on what the photo meant, but SpaceX operates a rocket test site, that is sometimes called Starbase, in Boca Chica, Texas.
In March, Musk tweeted that he was "creating the city of Starbase, Texas," which he suggested would be used for Mars missions.
Within two hours of Musk posting the Starbase sign photo, an apparently unrelated cryptocurrency sharing the same name rocketed in price, from around $0.005 to $0.2.
Before the price surged, the Starbase token, or $STAR, appeared to be relatively unknown. Its trading volume—a measure of how much of the cryptocurrency was traded in the past 24 hours—was around $15,000, according to CoinMarketCap. For contrast, the trading volume of the popular meme token Dogecoin is currently around $8 billion.
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At the time of writing, just over a day after Musk's tweet, the trading volume of $STAR is $4.5 million, suggesting investors have been trading it much more than before.
However, the token's price has dropped significantly from its Tuesday high of $0.2. $STAR is currently worth $0.04, down over 60 percent on the day.
The Starbase cryptocurrency platform was launched in October 2018. It states that it is a token-based crowdfunding platform through which startups can raise funds.
Newsweek was unable to access the token's whitepaper—an explanation of the technical details behind the cryptocurrency's operating methods—on its website.
The Starbase platform's official Twitter account appeared to acknowledge the boost it received from Musk's tweet, intentional or not. It wrote: "Hey, Elon Musk, thank you for the photo! We love the sign!"
Experts have previously warned Newsweek about the risks associated with cryptocurrency investing, including price volatility and hype.
Musk's apparent influence on the price of cryptocurrency tokens has drawn criticism in recent days. The price of Bitcoin has fallen over the past week, after he announced his electric car company Tesla would no longer accept it as payment.
At other times, tokens such as Dogecoin have increased in price following public support by Musk, often via Twitter.
A number of cryptocurrency tokens have been launched specifically in protest of Musk's perceived effect on the market.
Elon Musk at the site of the Tesla Gigafactory near Berlin, Germany, on September 03, 2020. Musk is considered influential regarding cryptocurrency.Elon Musk at the site of the Tesla Gigafactory near Berlin, Germany, on September 03, 2020. Musk is considered influential regarding cryptocurrency.Maja Hitij/Getty
