A growing number of business leaders and celebrities — e.g., Elon Musk, Jack Dorsey, Alex Ohanian and, most recently, Ricardo Salinas — have added the Bitcoin hashtag to their Twitter biographies. It hasn’t gone unnoticed. When Elon Musk added #Bitcoin to his bio in late January, Bitcoin soared by 20%.
If indeed a succession of billionaires and tech moguls have taken the Bitcoin pledge — whatever that might entail — what is their motivation? Are they trying to manipulate the market, for instance — or promote their brand?
Could they be just looking to pull the collective leg of crypto’s true believers? The CEOs, on the other hand, could be deadly earnest: signaling the technological future they believe is coming to pass — e.g., global and decentralized.
Whatever the reason, it seems fair to say that social media has been tilting Bitcoin’s (BTC) value proposition recently, and it raises some questions. For example, are cryptocurrencies more susceptible to social media messaging than other financial assets?
BTC and social media — Joined at the hip?
Rightly or wrongly, many users judge BTC’s success by its daily market price, and that price seems more entangled than ever with social media activity.
“Absolutely,” Feng Mai, an assistant professor at Stevens Institute of Technology’s School of Business, commented to Cointelegraph. “My research has shown that Twitter posts from influencers have an immediate effect on BTC pricing.” This is for two reasons, Mai explained: “Its lack of intrinsic value compared to other financial assets, and its adopters’ demographics overlapping with social media users.”
Neil Wilson, chief market analyst for Markets.com trading, added that cryptocurrencies — like some other assets that occupy relatively small pockets within the overall investing market, e.g., GameStop — seem particularly vulnerable to social media because they are relatively illiquid with large holdings in the hands of comparatively few…