Today I want to investigate the power of social media in investments and the crypto industry. How can internet communities play that huge role in an overall blockchain adoption? How do communities impact the token’s prices, and how to not get scammed like Pinocchio in a fairytale? I did a lot of research, and here is what I got. Buckle up! It will be an interesting journey for both of us!
The Role of Social Media in Cryptocurrency Adoption
Social media plays a crucial role in cryptocurrency adoption. It raises awareness even more than special blockchain-related events. How is it even possible? Usually, the guest list at those events consists only of people familiar with blockchain who want to build their network. It doesn’t have people who only start their crypto journey.
But socials can promote crypto awareness to people far from the tech industry. And they do it great! Many lifestyle bloggers share their crypto journey and display the strengths and weaknesses of this industry. This raises crypto awareness in the general public, making blockchain more accessible.
It also helps build a genuine community, which would benefit all its members. Those communities are one of the greatest because they create a strong, almost friendship-like bond between members. And if crypto businesses take advantage of social media, they can build a great marketing campaign that helps them skyrocket. The most productive way to raise awareness of non-crypto people is through educational content that helps them understand the mechanics behind blockchain and some promoted tools. People are willing to learn at any age if this decision brings them abundance. So, they naturally want to know how things work so they won’t get scammed.
Many brands also like to use influencer marketing to promote their brand or overall crypto awareness via famous bloggers. If brands do it properly, they can build trust and credibility for cryptocurrencies for a wider audience.
Many socials ban actual crypto-related ads due to the high-risk levels of potential scams. If a crypto brand wants to build a trustworthy community and promote itself as a reliable business, it mostly focuses on educational activities.
On Twitter, they can promote services and engage with customers with industry-related memes. YouTube and TikTok are wonderful places to make tutorials and showcase profitable investment strategies, news, and reviews of different coins and tools. Reddit and Quora are great places for discussions and community building. It already has many blockchain-related subreddits where users and brands share their experiences.
The Impact of Social Media on Cryptocurrency Prices
Social media can build hype around certain coins, which leads to unexpected price hikes and drops. The most infamous example is the Elon Musk & Dogecoin case. This token was created as a joke. And it was a cheap coin with a stable price up to 2021 when Elon Musk discovered it. He started to tweet about Dogecoin, which led to an insane price increase of up to almost a dollar for a single Dogecoin in the middle of 2021.
So, in people’s minds, this digital coin became tied to Elon. And when he did controversial things, it reflected in the Doge’s price. And as for the middle of 2023, it costs less than 10 cents for a token. It led to the frustration of all people who invested (bought it in bulk) in Dogecoin back in 2021, so they decided to file a $258 billion lawsuit against Elon.
As you see, social media has a considerable impact on cryptocurrency prices. So, it is crucial to keep a wise approach to socials if you decide to create your own small crypto startup. Use them as a place to educate your potential clients, share important news, and show them how to resist pump-and-dump schemes and market manipulations.
If you do it well, you can build up a great community of like-minded people. You can grow them into your brand advocates who will promote your business for free. But everyone should keep themselves away from pump-in-dump schemes. As the world falls more into the new recession, we may see dozens of startups that seem legitimate, but in reality, they will be yet another scam.
In those schemes, a group of criminals is coordinated to artificially create hype around some coin to increase its price. Once a coin reaches a certain number of users who bought it, criminals sell their holdings, causing the crash. The most infamous cases are Bitconnect, OneCoin, and Centra Tech.
Social Media and Cryptocurrency Regulation
Socials have a significant impact even on crypto regulations. People tend to share scam stories on their profiles to prevent others from making the same mistakes. And once the number of similar complaints on social media becomes that noticeable and it is being shared on local, national, or even international news, governors see it as an opportunity to regulate those situations.
Also, socials can be a public space where users share their opinions about various regulations and how to change them in a way that improves the community. Some people from this dispute may become local governors or influence the current governor to support this point of view in the government. It helps create a regulated community that is safe for every member.
Socials are also a great platform for crypto advocates to engage in activism and build support for their positions. Influencers can mobilize their followers to contact legislators and organize events that could make their point of view an actual crypto law.
As for 2023, the most common way socials affect crypto laws is the partial ban of cryptocurrencies in some regions. Unfortunately, many conservatives are scared of crypto innovations to the point that they ask for a ban on the whole industry instead of making strict safety blockchain-related laws.
It happened in 2017 in China, and in 2021 in Turkey, Mexico, and Nigeria. But on the other hand, many countries partially legalize crypto due to public demand like the US, UK, Netherlands, and Ukraine.
Social Media and Cryptocurrency Fraud
Unfortunately, due to a lack of crypto regulations, socials remain the sweet spot for scammers. They like to find highly volatile users who become their target as potential victims. They try their best to fool this person, so they voluntarily provide them with funds from their wallet. Considering that it is impossible to launch a reverse operation, that money stays in the hacker’s wallet.
Users who are aware of those tricks use services with built-in anti-money laundering (AML) protection. Those tools can show that some accounts are related to potentially dangerous activities. But many users are still too trusting of people around the internet.
Scammers are often using fake cryptocurrency giveaways, pump-and-dump schemes, and phishing attacks. Those are the three most common types of crypto-related fraud in social media. Some audacious scammers even try impersonation scams where they impersonate companies, exchanges, or even individuals to trick users into sending them money or personal information.
One of the most infamous pump-and-dump schemes was the Squid coin scam back in 2021. Investors had to play to earn cryptocurrency: they would buy tokens to play blockchain games and earn money for it. The price of a Squid token went from $0.01 up to $90 per single token. In less than three months trading stopped, and the money disappeared. The token value reached zero, and scammers made about $3 million from deceived investors.
That’s why it’s important to be aware of the latest trends and be part of the community. It helps you not fall into promising projects that have scam elements. Also, it would be much easier to monitor socials and report those projects if you do it together as a community.
Wrapping Up
Social media plays a crucial role in cryptocurrency adoption. But it can be both salvation and a weapon at the same time - everything depends on what projects you are using. Socials can spread awareness and build a strong and genuine community that is publicly monitored for promoting only reliable projects.
Those communities can raise crypto awareness even for people who are far from the tech and blockchain industries. It helps expand the crypto community organically and creates an even more diverse industry.
But on the other hand, socials are still full of various crypto scammers that blacken the reputation of all blockchain-related industries. Scammers like to trick users with false investments and Ponzi schemes. They also like to create fake giveaways and phishing attacks, so wallet owners voluntarily send them money or share personal information that helps hack their crypto and bank accounts.
So, it is important to build a community that helps to make the crypto world a better and safer place. Join Defiway socials to become part of a deliberated and law-abiding community. We gladly share with you our knowledge and efficient tools, so we can build a powerful trusting community together!
