What’s the first thing you do when you start your day? We don’t know about you, but a lot of us check our phones. How many likes did my post get while I was asleep? What are my friends up to today? How about a few funny TikTok videos before I start my morning routine?
At this point, it’s safe to say that social media plays a massive role in our daily lives. It’s how we connect with our loved ones, get our news, or even just kill time. If something isn’t trending on social media, then is it really happening? All jokes aside, you probably know that social media’s impact reaches new heights, and now, it’s safe to say that it could even affect cryptocurrency prices.
It started from the forums that discussed cryptocurrency’s humble beginnings. Now, it makes headlines on our favorite social media apps. With popular cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) reaching all-time highs on a regular basis, it isn’t at all hard to believe that these digital currencies are trending.
Social media’s intricate relationship with the crypto world
Before social media exploded into the blooming flower that it is today, creators didn’t see a lot in return for their content. Of course, the social media platforms made their share, but the creators themselves weren’t benefiting much from their hard work and creativity. These circumstances were what made cryptocurrencies so appealing to content creators before—it gave them another avenue to get compensated for the work they put in.
Now, let’s fast forward a bit: a time where social media has a lot more power in our society. Today, social media is a double-edged sword that can help or harm crypto prices. Social media has this power because it paints the portrait of cryptocurrencies to the masses. If the picture is flattering, it could make the prices go up. However, if it’s a negative portrayal, it could bring the prices down. In other words, social media has the power to control the investor’s moods. When you factor in the volatility of cryptocurrencies and high usage of platforms like Facebook, Instagram, Twitter, and TikTok, you can see how social media can play a significant role.
The power of the trend
In July 2020, there was an odd surge in Dogecoin (DOGE) price because of a TikTok trend. A user named jamezg97 uploaded one of the earliest Dogecoin-pumping TikTok videos, which eventually caused its price to surge.
@jamezg97Wait til the end it’s worth it #dogecoin #stocks #crypto #DogecoinTiktokChallange♬ Lets get rich tiktok – James G
Let’s all get rich! Dogecoin is practically worthless. There are 800 million TikTok users. Invest just $25. Once the stock hits $1, you’ll have 10 grand. Tell everyone you know.
It was definitely one of the weirder cryptocurrency trends of 2020, but it evidently showcased social media’s true power in this space. DOGE continues to rally until today, so if you’re looking to get on the trend, you can always exchange your Bitcoin for Dogecoin.
A more recent example came from Tesla and its founder, Elon Musk. In early February 2021, Tesla, an electric car and clean energy company, announced that they bought 1.5 billion USD worth of BTC. The company stated that this purchase was to add “more flexibility to further diversify and maximize returns” on their cash. They also said that they’d be accepting BTC in exchange for their products, making them the first major automaker to do so.
After this happened, BTC hit an all-time high and broke the 44,000 USD mark for the first time. It even got to the point where Elon Musk added “#bitcoin” to his Twitter bio, causing a craze in the market. As we all know, Bitcoin’s price eventually hit the 58,000 USD mark (its all-time high) and continued to shock people all over the world… until Elon Musk got involved again.
At one point, because of his big BTC purchase, Elon Musk was the wealthiest person in the world. However, at the time of writing, he no longer holds that status. You may be wondering: what happened? Well, he tweeted about the rising prices of BTC and ETH, saying that their prices “do seem high.” Bitcoin price fell after that one Tweet.
That said, BTC & ETH do seem high lol
— Elon Musk (@elonmusk) February 20, 2021
We can’t assume that the Tweet is the only reason Bitcoin dipped after that but, at this point, it may be hard to believe that it’s merely a coincidence.
The Dogecoin bonanza and Elon Musk’s adventures are prime examples of how social media can affect investor moods and, in turn, affect the crypto price. There are probably other factors to it, but social media may be the most glaring one.
The name of the game
Basically, what we’re trying to say is that social media is powerful. However, we have to keep in mind that there’s a possibility that tweets or Tiktok videos are part of a scheme to drive up crypto price. Nevertheless, it’s time that we acknowledge the true power of social media and accept that no matter how good or bad a post is, it has the potential to affect the market.
With all that said, we believe that social media will play a considerable role in cryptocurrency’s maturation phase because of its power to educate. There are now accounts solely dedicated to educating people on the wonders that cryptocurrency can bring to the world. In the cryptocurrency space, education is the name of the game. The plethora of social media groups and channels dedicated to this is astonishing, and we can’t wait to see it grow even more.
*Disclaimer: The content of this article is for informational purposes only. The opinions expressed here are not meant to be taken as financial, investment, or any other advice, nor do they express the opinion of Paxful.