Influence of Influencers on Bitcoin & cryptocurrency market

Influence of Influencers on Bitcoin & cryptocurrency market

Influence of Influencers on Bitcoin & cryptocurrency market

On May 1st I was holding $2000 worth of BTC in one of my exchange accounts and the BTC price was hovering around $56K. Like many people I too was bullish about BTC’s current trend. I decided to go LONG with 2X leverage. Next week the price rose up to 57K and on May 9th it reached $57,958.
Being so bullish about BTC, I didn’t bother putting a stop loss.
Rest of the story is engraved in BTC history. Over the week Bitcoin kept on falling while many of us were still being very bullish about it, until I received a rude shock of BTC dropping to $38000 and my positions were completely liquidated to ZERO.

Now the question arises:

Whether I knew about a certain person -Elon- on twitter-with millions of followers- was speaking about BTC not being environment friendly or overpriced?

"YES, I DID read it, but ignored"

Did I knew about the latest  news about China banning crypto mining?

YES, I DID, thought it is an old news

In hindsight I understand that what I did can only be explained as pure stupidity. However, I still consider myself luckier than many; since a significant portion of my assets still survived in other crypto wallets (no need to look for any jobs at McDonalds)

But the moral of the story is NOT about me sharing ‘trading lessons’ with you (Seriously guys, always put a stop loss while you trade) or demonstrating the ‘volatility of  Bitcoin’, 

It's about how much sway a few celebrities can hold on cryptocurrencies that about 50% value is wiped clean overnight by simply talking trash/Nice on Twitter.

Elon Musk’s impact on the crypto world

Having a celebrity talking about Bitcoin & cryptocurrency is not a bad thing at all.

In fact it only encourages adoption and benefits in the long term. Musk’s involvement in the crypto world is giving the industry some much-needed mainstream attention. 

Whether it’s his foray into the world of non-fungible tokens (NFTs), tweeting about Dogecoin, or simply talking about crypto in general, Musk’s comments have helped crypto become that much more popular among the general public.

And to support our claim we are lucky that Blockchain Research Lab has already done the research to support our claim

On January 29, 2021, Elon Musk unexpectedly changed the description of his Twitter account to #bitcoin. The price of Bitcoin rose by approximately $6,000 in a matter of hours, increasing its market capitalization by $111 billion.

Was their a relation between Elon's Bio change and BTC price spike?

You can arguably say that Elon's Twitter activities had a significant impact on return and trading volume of the corresponding cryptocurrency (Bitcoin or Dogecoin) in the following minutes and hours. In fact a few of my friends who actively trade crypto started following Elon to align their trading strategy as per his tweets.

Here are a few of these events as published by Blockchain Research Lab.

You can observe the hard to miss spike in Price and Trading Volume after Elon's tweet on Doge.

You can enjoy reading the full study here: link.

This shows that Elon's tweet can actually move markets and he praising on specific cryptocurrencies can potentially lead to an increase of $111 billion in Bitcoin’s market capitalization, a different tweet could also wipe out a similar value.

Things goes south when Personal whims & manipulation are introduced

Although Elon is not a Whale who manipulates market trades, he holds a significant clout of influence via his followers especially on Twitter. 

However Elons’s sudden reversal in stance & negative tweets have also sent crypto prices crashing as well. Over the past week, Ethereum & Bitcoins prices have crashed by almost 50 percent. Musk’s tweets alone have caused frenzie amongst people leading to mass sell off in the markets, and many crypto investors are frustrated by this.

Some are even claiming that Musk is manipulating the cryptocurrency markets for his own personal gain. We’ve already seen the SEC step in to charge Musk in regards to his tweets about Tesla shares. Since financial regulators aren’t going to step into the crypto markets, investors are taking it up themselves to stop Musk's reckless tweeting. We’ve seen new groups and projects spring up, such as StopElon, a type of meme coin dedicated to raising awareness about Musk’s supposed power over the crypto market. 

Musk is not the only celebrity who moves the Crypto market, here are a few of them

TOP influencers in Crypto markets whose social posts can move the market !!

1. Anthony Pompliano

2. Vijay Boyapati

3. Simon Dixon

4. Max Keiser

5. Saifedean Ammous

6. Brady Swenson

7. Plan B

8. Andreas Antonopoulos

9. Meltem Demirors

10. Jack Mallers

11. Stacy Herbert

12. Raoul Pal

13. Michael Saylor

14. Peter McCormack

15. Dan Held

16. Super Crypto (God, Gold, & Geopolitics)

Although most of these influencers are great advocates of Bitcoin adoption and maximalist, which is inherently a good thing. But each one of them has a potential to bring the crypto market down single handedly.

Such power in few can create obstruction in cryptocurrencies to become mainstream. A mass adoption of Bitcoin & other crypto is impossible, if the market keeps on dropping or rising by 20 per cent at the whims of these celebrities.

What could be the Solution for this?

Can you #HODL when the market’s volatility wreaks havoc, since a very few can afford to do that, #HODLing can’t be a solution.

Unfortunately there isn’t any simple straightforward solution. Cryptocurrencies need these celebrities for the much needed push for mass adoption. Which means we all should be prepared for those bumpy rides for which bitcoin is famously known for.

A regulating body like the SEC might temporarily solve this problem, but it is difficult to implement such a thing for cryptocurrencies. Blockchain & Bitcoin by nature are designed to avoid anyone to govern/regulate it i.e decentralised and self regulated by those who have adopted it.

What the market needs is a little bit of maturity.

Where people don’t dump their assets at the whims of a few notorious celebrity tweets who manipulate the market by banking upon their followers.

Here is Latest meme which made #BTC fall by 2K

Here is tweet from Binance CEO who understands problem here

Greater power with great responsibility, great. Great power with random “humor”, not great, and not funny.

Cryptocurrency market needs to mature past the point where a single celebrity’s opinion becomes irrelevant to the market. Maybe in the next 5-10 years we might witness such maturity.

Till then just have to hang on tight through some massive turbulence