Cryptocurrency has become the new talk of the town. Back in the days when people used to be skeptical or downright scared regarding currency format, they are now coming forward with stories of how they made millions investing in these currencies.
As the name suggests, Crypto denotes something mysterious or hidden, and when you combine it with the most powerful tool, “money,” it automatically creates a buzz around it.
This currency is decentralized, and transactions made are secure using Blockchain technology, which, as per the developers, is incredibly safe and impossible to hack into.
This would have been enough for people to jump on the bandwagon of this digital circus, but they didn’t. They still had little to no faith in this type of currency when it was still in the crib.
All they could fathom this revolution with petty theft; while there was no physical ‘money in hand’ for people, it made them suspicious about this new form of virtual money.
Despite all the criticism, a handful of the population was rooting and showing their faith in the newly invented digital currency, and today everyone aspire to join the clan. A lot of whom regret not taking the first movers’ advantage. It is common to see a group of newly bred crypto enthusiasts or a group of friends who recently discovered a story of someone becoming rich overnight by investing in these currencies. They would then let out a cry of misjudgment and condemn their younger self for not investing during those years when the market was still small and growing.
Along with Cryptocurrency, social media has also seen a massive rise in its users. Sometimes it feels like the whole world is on social media, which might be why it has an enormous impact on the culture of our day-to-day lives.
Social media provides a platform for people who never imagined they would have one or those who desperately needed one but were never allowed to demonstrate their interests.
These social platforms make it easy for people to put forward their point of view and share it with the world. It would not be wrong to say that, with the help of social media, any No-Joe can pick a fight with, say, Einstein.
With such an enormous impact on the lives of ordinary people and everything around them, it is not incorrect to say that social media has a significant effect on the fluctuations and pricing of Cryptocurrency. After all, something created digitally has to be highly influenced by some digital platforms. It looks like nature but in a digital form.
How does social media affect cryptocurrencies?
When all the commotion of Digital currencies had started, there were little to no tools to roll out their wagon onto the road. The social media platforms later took on this crucial task.
They became the hub for these currencies to advertise themselves.
Why have these platforms worked, and are they still going strong? It’s a simple explanation.
What crypto and social media are doing is creating a digital world, a world ruled by a relatively young audience. Audience who is eager to invest and expects some over-the-top returns.
Recently Telegram using a bot has allowed its users to transfer Cryptocurrency within the app; for starters, it’s only Toncoin, but with the help of a wallet, the door to bitcoin is accessible.
Similar movements were seen on Twitter a few months back when they announced that they would be adding bitcoin payment for the tipping method with the lightning network.
There are platforms like Discord which houses some of the largest crypto communities; the same goes for Reddit. These communities, or families, as they like to call themselves. Commence a massive demographic, which can take a coin to the moon when banded together.
People have already started using platforms like Instagram and Facebook to promote their coins. These two hold the most extensive user base, creating trends, news and advertisement; they can generate a massive investment surge.
Discussing the impact of social media on the market brings a recent incident relevant. It was a fight that people interpreted as David v/s Goliath.
It was a fight between some rookie investors from a platform called Reddit and some big hedge funds. The stock that served as their battleground was GameStop, an outdated business that saw more than a thousand percent hike because of these rookies. This incident showed the world what a community on a social media platform could do, and since then, all these massive organizations have started betting on them.
This might not be Crypto news per se, but this is how the Crypto market usually works. All these enthusiasts come together to form a group to discuss and share insights about their favorite currency and try to make their investment profitable.
The older generation might disregard crypto as it might be relatively new and somewhat complicated to grasp, but the generation that rose along with social media thinks differently.
Take Dogecoin, for instance. It’s a meme coin. It started as a joke, but look at its market cap in recent times. Memes hugely impact its fluctuation. In the past year or months, a tweet from Elon Musk would skyrocket the graph of Dogecoin, and any negative memes would bring it back down.
This incident suggests that “what’s in the trend” can make or break a coin. Anyone who wants to feed the giraffe that is cryptocurrencies needs to use a social media ladder to reach there.
What is the downside of this #trending market?
In a sense, or by analyzing a pattern, one can say that a large portion of the crypto marketer uses different social media platforms. These platforms serve as mutual grounds for investors and inventors.
For most of them, these platforms are the only source of any news relating to this market, and they tend to believe whatever is posted on these forums. This makes managing it a bit tricky.
As the Crypto Market is not centralized and the power is in the hands of the investors, the same is with these social media platforms. Many of these forums are not regulated and often not bound by legal implications regarding the authenticity of any news. This makes it more difficult to authenticate the source and tell the difference between real and fake.
This practice easily manipulates the investor and forces them into impulsive buying or selling.
It can be said that with the massive surge of digitization, all these tools are having an increasing impact on their users. One ought to be very careful while trading using these methods.