More and more business leaders and celebrities such as Elon Musk, Jack Dorsey, Alex Ohanian and more recently Ricardo Salinas have added the Bitcoin hashtag to their Twitter resumes. This did not go unnoticed. When Elon Musk added #Bitcoin to his roundup at the end of January, Bitcoin was up 20%.
If a number of billionaires and tech tycoons really believed Bitcoin’s promise – whatever it was – what was their motive? Are they trying, for example, to manipulate the market or promote their brand?
Can they just try to stretch out the collective leg of the true cryptocurrency proponents? On the other hand, CEOs can be deadly serious: they point to a technological future that they believe will come, for example, a global and decentralized one.
Whatever the reason, it seems reasonable to say that social media has tended to offer the value of Bitcoin (BTC) lately, and this raises some questions. For example, are cryptocurrencies more vulnerable to social media than other financial assets?
BTC and Social Media – Have you joined the hip?
Right or wrong, many users judge BTC’s success by the daily market rate, and that price looks more closely related to social media than ever before.
“Quite right,” Feng Mai, assistant professor at Stevens Institute of Technology, told Cointelegraph. “My research shows that Twitter posts from influencers have an immediate impact on BTC prices.” May attributed this to two reasons: “There is no intrinsic value compared to other economic assets, and the demographics of users match those of social media users.”
Neil Wilson, senior market analyst at Markets.com Trading, added that cryptocurrencies – like some other assets that have relatively small pockets in the overall investment market, such as GameStop – seem particularly vulnerable to social media as they are relatively liquid. large holdings. In the hands of relatively few people, and also because they have an “audience / follower”.
Leonard Noah, research manager at Stack Funds, a provider of digital indicator funds, told Cointelegraph that while social media is not changing BTC’s “core value proposition,” which remains strong, “tweets act like boosters.”
Finn Brunton, professor of science and technology research at the University of California, Davis and author of Digital Criticism: The Unknown History of Anarchists, Utopians, and Technologists Who Created Cryptocurrency, told Cointelegraph that BTC and social media have been intertwined since its inception. … bitcoins.
According to him, “Bitcoin has always been first and foremost a movement on social media, and secondly, a valid currency, driven by reviews, tricks, memes and advice from HODL and Faith.” In this sense, the price of BTC rises sharply when boss Foguchi changes his Twitter bio to “all-brand”.
Is celebrity interest good for bitcoin?
On the front page, it seems like the timely addition of #Bitcoin to Twitter rolls from tech leaders like Dorsey, Ohanian, and Musk is generating more interest in Bitcoin and ultimately increasing acceptance and acceptance. Wilson told Cointelegraph:
“The start-up support we see for Bitcoin is very important due to the price increase in recent months. The Tesla move is a kind of big business support that bulls are holding onto. More business support means more generalization and more acceptance. Network impact is the key here. ”
May added: “The adoption by Musk and Tesla of bitcoins is good news for cryptocurrency as it provides confidence in cryptocurrency as a medium of exchange, which economists believe is one of the main functions of money.”
But doesn’t the social media turbo tax make the price of BTC more volatile – volatility has long been considered one of the biggest disadvantages of cryptocurrency? When billionaire Salinas, the third-largest man in Mexico, added #Bitcoin to his Twitter bio in early February, the price of the main cryptocurrency asset topped $ 40,000 for the first time in 23 days.
May replied that listing large companies like Tesla outweighs any short-term volatility, and large companies will make Bitcoin less volatile: “Companies that accept BTC now should have more incentive to stabilize the value of BTC – they don’t. want income to fluctuate greatly. Day after day. ”
Regarding the recently hashed biography, Brunton commented that this is not exactly a bull in BTC: “It’s good for Bitcoin that more purchases from the rich equals more parties investing in keeping this leaky fleet afloat.” In his view, in the long term, users will switch from BTC to cryptocurrencies that “perform better, are better designed, or have better usability.”