Social media platforms have not only become an important part of entertainment and businesses but also bolstered the cryptocurrency in no way before. Cryptocurrency, despite a lot of potentials, is still far off from tapping in mass users. This is mainly due to lesser information available out there and user apprehensions. These apprehensions are fuelled by the decentralized nature of the currency. More of its potentials and trends are yet to be explored by people at large.
A number of social platforms such as Cryptointalk, The Bitcoin Forum and others are running to make their members aware of the cryptocurrencies (Bitcoin, Ethereum, NEXO, DENT etc). They are also educating their members to apply the best trading strategies to increase their returns from the Bitcoin investments. They provide a sneak peek into the operations and opportunities on the platform for the exchange of cryptocurrencies. This would help the members know the indicators of when to invest their money or to draw in their money by selling off the bitcoins. To know more about such platforms click here.
Relation between price and social media
Due to the high indulgence of property and investors, bitcoin has been one of the most talked-about topics in the world. Platforms like Cryptointalk and the Ethereum-code have forums for the experts to talk on the trends and patterns of the bitcoin price.
For example, Twitter has a lot of subscribers who shares their knowledge with their followers about the current occurrence. Many researchers have found out that the posts, discussions or comments gone viral on social media platforms have a direct impact on bitcoin price. This follows a very basic concept as given below.
● Up and down with the hype
Basic economics says that increased demand for a product or property increases its price. Similarly, every time there is hype on social media about the bitcoin price, the price or value gets affected. Negative attention on the same leads to plummeted prices and positive attention on the topic leads to a rise in bitcoin price. Such as, the release of news of an update to any of the cryptocurrencies and the spread of such news of update would lead to an increase in the price of the same. 56.7% of people across the world use social media and spend an average of about 2 hours and more on these platforms. Therefore, this increases the potential and their capability to change the trends in bitcoin prices. News or discussions on the hacking of certain platform trading into the cryptocurrencies and cases of insolvent exchange leads to the users drawing in all theory money before the business folds.
Research undertaken by Mr Mai has revealed that bitcoin price fluctuates more with the users who have low or infrequent appearances on social media as compared to those who are easily found and always posting. An experiment was done by dividing the Twitter users interested in bitcoin into two groups. One of them had 60% of the opinions on the Twitter walls. The other group had very few opinions. Very active users commenting on Bitcoin value did not seem to move the prices. However, those who are less active and had more knowledge of Bitcoin had more impact on the Bitcoin value changes with their opinions on such platforms. Mai explained this to be due to the apprehensions that active users and great talkers have biased opinions about cryptocurrencies.
According to analysts, infrequent users, who often take time to do their research on the bitcoin prices or values have moved the bitcoin pieces to almost 10 times when they posted positive comments.
● Examples
An odd surge was noticed in the price of Dogecoin in July 2020. This was caused by a Tiktok trend started by a user named jamez97. The user uploaded a Tiktok video that pumped the Dogecoin information. This led to an increase in the price of the specific cryptocurrency greatly.
Another recent example of the weird but true relationship of social media and Bitcoin price is the case of Tesla. In February 2021, Elon Musk, the founder of Tesla made an announcement that they bought bitcoins worth 1.5 billion USD. They mentioned that this step was aimed towards gaining more flexibility, to diveri=sify their exchanges and maximize returns from their funds invested. Tesla also announced that they will accept bitcoin as a medium of exchange for their products being the first major automobile company to announce so. Bitcoin price hit an all-time high after this incident and broke a record of 44,000 USD in its history. Post this, the bitcoin price went further high to 58,000 USD dollars before Musk got involved again.
This time. Musk tweeted that the bitcoin prices “do seem high. Immediately after this, Bitcoin prices fell. Though, there is no strong foundation in saying that the Tweet caused such a decline in Bitcoin price this cannot be a mere coincidence after knowing the trend. Therefore, bitcoin news on social media has a powerful role to play in driving the value up and down.
Easy tracking
Bitcoin is now a worldwide phenomenon, and one can follow its great rise on a variety of social media platforms. Cryptocurrency is becoming a daily topic of discussion on Twitter, Facebook, and Reddit. These internet forums host big news and conversations. Hence, the importance of bitcoin solutions has increased dramatically.
Even teams for development and cryptocurrency initiatives use social media to run their platforms. Slack and Telegram is used by altcoin teams, Bitcoin developers, news sites, and Bitcoin businesses to mention a few. With groups working virtually from all around the world, this setting has produced a unique vibe. Several of these crypto-workgroups function in a holacratic manner, which has altered the way firms operate.
These are the key reasons why companies or investors often bring in social media users or brands to create engaging and influencing bitcoin-related videos or any form of content. They try to manipulate the prices of the currency using social media platforms.
