As the crypto market swings up and down, continuing its roller coaster ride experts and newbies alike wonder what causes these huge peaks and valleys. We have seen internet advertising giants like Google, Facebook and Twitter ban ads for cryptocurrency and particularly ICOs but that doesn’t stop people from talking about these things, and it definitely does not stop the captains of industry from spreading the word themselves.
Tron’s founder Justin Sun is an avid tweeter and uses the platform several times a day to spread Tron’s message of a decentralized web. But he is also often accused of trying to “pump” his coin which causes many to question the legitimacy of the project as they fill his account with negative responses.
Chan Hun Kim of Korea University in Seoul completed a study on how social media can swing crypto markets. The study was published by PLOS One and concluded that the amount of comments on social media about a coin in particular can be used to predict its market performance. Furthermore, positive social media comments increase the coin’s price while a bulk of negative comments would lead to a decrease in value.
Communities of investors often accuse competing coins of being shills and hive mind can quickly infiltrate and influence the market. Even the founders of coins and important blockchain developers can be seen exchanging sharp blows on Twitter and other social media platforms.
Ethereum co-founder Vitalik Buterin is known for lashing out at competitors, and expressing his opinions no matter who’s feathers may get ruffled. Charles Hoskinson the founder and CEO of Cardano, who’s also been known to exchange jabs on Twitter, has also been panned for posting pictures of his travels and his meals.
Hoskinson took so much flack for his “foodstagraming” that he was prompted to address it and ensure that he is working hard to deliver a great product.
Cryptocurrency and blockchain are being developed and going through growing pains in a time when information spreads like wildfire. On top of that, many of the shapers of this space are from a generation that only knows and has lived in the word that the internet has created.
A generation that has grown up making memes and status updates is now at the forefront of what many see as a world changing movement. Investors, developers, enthusiasts, and those who are just simply curious about the new technology must wade through tons of immature influencers to find valuable worthwhile information on cryptocurrencies.
Talk of coins going to the moon and buying Lambos with all the profits isn’t exactly the type of conversation that will bring institutional money into the market, but will succeed in attracting immature investors with the idea of getting rich quick.
Social media has an incredible power to influence millions of people in increasingly faster and more efficient ways. It can be the origin of both FUD and FOMO and has the ability to sway the crypto market in either direction.
