Social media has a huge influence on the lives of most netizens, often dictating the way the world is perceived. The cryptocurrency business is not any exception. In fact, a new report by Finder.com has predicted that social media will underpin the industry’s growth going forward. And, there may be good cause to consider so too.
The report, studying cryptocurrency usage in Australia, found that more than half of the country’s population got their crypto-news from social media. Nevertheless, it is a phenomenon that may be seen worldwide, particularly throughout the developed world. Additionally, a higher proportion of the younger generation makes up that population, just as they do in the case of cryptocurrencies.
Cult of personality
This correlation performs out in some ways, not a lot of which might be thought-about optimistic. Even though social media allows users to gather information and interact with communities, it can also lead to many gaining cult-figure status.
Dominant figures like Ethereum Co-founder Vitalik Buterin and Cardano Founder Charles Hoskinson repeatedly host AMA classes and are comparatively lively on Twitter. While this has garnered them huge fan bases, it can also lead to blind trust.
This, in some ways, has spurred the problems of crypto-scams in the neighborhood. Twitter scams, especially, are a significant concern, with fraudsters convincingly impersonating these personalities to trick users with giveaway contests.
The business’s greatest promoter?
A more interesting case in point is Elon Musk. His strong influence on social media has had a major impact on the larger crypto-market. As soon as the Tesla CEO took Dogecoin below his wing, the meme coin noticed exponential development primarily based on every part however benefit. Musk’s regular endorsement of DOGE on Twitter led to the alt climbing into the top 10. And never simply novice traders, however celebrities like Naomi Osaka are additionally falling for the trick.
DOGE is not the only coin that Musk has his grip over, with the price movement of Bitcoin often being correlated with his public statements. Finder charted out how Elon Musk’s tweets coincided with Bitcoin’s costs, noting {that a} earlier survey discovered that “56% of Australians incorrectly consider Elon Musk created Bitcoin.”
Steer clear of the ‘just hype’ crowd
Such affect can spell bother for each traders and cryptos because it makes the market extra prone to manipulation. Along with losing out on their investments, people can also fall victim to the shilling of worthless coins.
It’s no surprise then that some international locations like China have banned influencers from advertising cryptocurrency or finance-related merchandise on social media. This is an important step, especially since the space is already filled with alts that are profiting from just hype.
Whereas social media acts as an entry level for a lot of and is a good medium, it may be dangerous when most traders are novices and lack information. Moreover, the growth of cult personalities might spell doom going forward, especially if you don’t DYOR.
