The study conducted by the Network Contagion Research Institute (NCRI) suggests that Twitter bots may be playing a significant role in artificially inflating the prices of altcoins. The study analyzed over 3 million tweets involving 18 altcoins listed on FTX from January 2019 to January 2023.
According to the study, Twitter bot activity was found to amplify the value of cryptocurrencies such as The Sandbox, Gala, Gods Unchained, and LooksRare. Half of the coins showed signs of price influence as a result of tweet bot activity. The study also noted that inauthentic tweets increased after FTX posted about the token on social media, raising questions about FTX or Alameda Research’s potential role in coordinating bot activity.
The study also examined the impact of Elon Musk’s crypto-related tweets on memecoins Pepe and PSYOP. It found that bot activity and Musk’s tweets influenced the prices of these tokens. For example, Musk’s tweet featuring a Pepe meme caused the token’s price to increase by over 50% within 24 hours.
The researchers highlighted that this phenomenon could also affect stocks and other securities, citing the social media frenzy surrounding “meme stocks” like GameStop and AMC in 2022.
In summary:
– A study suggests that Twitter bots may be artificially inflating altcoin prices.
– Inauthentic tweets increased after FTX posted about tokens on social media.
– Elon Musk’s tweets influenced the prices of memecoins Pepe and PSYOP.
– The phenomenon could also impact stocks and other securities.