What the stars have to say: crypto, celebrities and social media

The cryptocurrency market is very young, with a history of just over 10 years. However, to claim that it is as decentralized as cryptocurrencies would be an exaggeration.

For example, about 64% of all bitcoins are in 16,000 wallets (0.06% of the total). Just over 13% of all mined coins are on the balance of just 97 bitcoins. The situation with other cryptocurrencies is similar.

Such a position in the market makes it easy to manipulate. This is the main reason why cryptocurrencies are so highly volatile. At the same time, the cryptocurrency community brings together millions of users around the world. And like any other group with similar interests, it has its own bright opinion leaders.

It often happens that a trivial remark in social network or mentioning about some “Coin” from the lips of someone significant for the community leads to a sharp rise in the value of this cryptocurrency. Or the exact opposite situation – its rapid depreciation.

We offer to remember real cases of celebrities’ influence on the value of digital money. Let’s try to understand – is this influence really that powerful? Or are we dealing with a typical stereotype? What is the cause or the effect?

How Elon Musk “raised” bitcoin by 20% in one day

A very recent example is worthy of the first mention. On Friday morning, January 29, Tesla owner Elon Musk added the hashtag #bitcoin to his Twitter page, accompanying it with a short message:

“In retrospect, it was inevitable.”

Many of his followers – and the businessman has more than 44 million followers – decided that the two events were connected. And on the same day, the price of bitcoin rose by almost 20%.

It’s fair to say that Musk’s use of social media isn’t the only influence on the value of cryptocurrencies. Earlier this year – on January 7, to be exact – he published a brief message on the same Twitter:

“Use Signal.”

After this publication, the shares of Signal Advance, an unknown company, rose 5 percent. And an encouraging statement about the game Cyberpunk 2077 led to a 19% rise in shares of its developer – the Polish company CD Project.

And what do scientists think?

Back in 2018, a group of researchers at the Stevens School of Business conducted a curious analysis of the impact of online comments on the value of bitcoin. Researchers processed 3.5 million Twitter posts and comments from users of the largest cryptoforum BitcoinTalk over 2 years. And then they found out some interesting facts:

  • Any user comments that mentioned cryptocurrency very often had almost no effect on its value.
  • On the contrary, rare statements by people who almost never mentioned digital money before led to a tenfold increase in its value.

How to explain such an incredible result? According to researchers, cryptoinvestors traditionally consider “talkers” to be the ones who actually drive the price of bitcoin. And “talkers” (those who talk about cryptocurrency too often) are seen as users just trying to create a hype on a hot topic.

Another group of analysts studied in detail more than 1 million tweets from about 100 English-speaking celebrities between 2018 and 2020. As a result, it turned out that the frequency of mentions of any cryptocurrency increases after its value changes. So it turns out that it’s not opinion at all that affects the change in price? Is it the other way around?

Stars aren’t the only thing that affects the price of crypto
But here is the most interesting part! Not only celebrities can powerfully influence the price of a particular cryptocurrency, but also a large number of ordinary users. By coordinating their efforts, they can even reverse the global trend!

On January 29, Dogecoin cryptocurrency grew in price 10 times in a day. The meteoric rise of this coin began after a call to buy Dogecoin voiced in the Reddit community r/SatoshiStreetBets, which has 180,000 users.

This achievement far surpassed the scale of Ilon Musk’s ventriloquist abilities. A year earlier – after he tweeted about the prospects of using Dogecoin as a global currency – the coin gained “only” 17%.

The dark side of the issue

When celebrities and influencers mention cryptocurrency on their own initiative is one thing. But it is quite another when celebrities are involved in advertising cryptoprojects on a paid basis. Such projects often turn out to be fraudulent.

For example, two years ago in the USA, the SEC fined world boxing champion Floyd Mayweather and famous rapper DJ Khaled a few hundred thousand dollars for advertising Centra Tech. The regulator considered this scheme fraudulent. And the resulting losses of investors amounted to more than $32 million.

Steven Segal suffered a similar fate when he was fined $314,000 by the SEC for advertising the ICO Bitcoin2Gen. Of course, such cases do not mean that the aforementioned celebrities deliberately misled admirers of their talent. Such gigantic fines became possible due to the peculiarities of the U.S. law. According to the laws of this country, ICO is equated to IPO, i.e. cryptocurrency tokens are legally similar to the securities.


All of the above suggests one conclusion – you should not be guided by appeals to buy crypto-assets even when legendary showbiz, sports or business stars convince you of it. At least, it is advisable to follow their advice only after a detailed preliminary study of all the intricacies of the question.

As practice shows, celebrities themselves often do not understand what they are promoting to their readership. And thanks to the fact that today the whole world is at arm’s length because of the rapid development of Internet technology, millions of people on the planet listen to their words.

If a cryptocurrency really has some value, its value will rise sooner or later – without any mentioning of it on Facebook or Twitter by some star Influencer.


Author: James Mirrow

James Mirrow is a professional investor with high returns at the U.S. level. James is also an expert in cryptocurrency investments and has MBA from the Economic Institute of Wisconsin.

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