‘Crypto Virgins’ Are Driving The Price Of Bitcoin

‘Crypto Virgins’ Are Driving The Price Of Bitcoin

Very recently, news has found that stablecoin, Tether, has been accused of being used to manipulate the price of Bitcoin. You can see our coverage of this story, here- https://cryptodaily.co.uk/2018/06/new-reports-find-that-tether-is-being-used-to-manipulate-bitcoin-price/ We all know that the cryptocurrency markets are volatile and thus, we all know that lots of influencing factors can change the price of Bitcoin, be that political, traditional-financial or indeed, crypto-financial. Interestingly, as the price of Bitcoin moves, the rest of the markets move, which is why, when we see research such as the following, it does come with an air of concern. If Bitcoin is being manipulated, then Ethereum, Ripple, Bitcoin Cash, EOS etc are all being inadvertently manipulated too. A research team from Stevens Institute of Technology have found through new research, that social media has an active role in manipulating the price of Bitcoin. The team have found a positive correlation between and increase in positivity surrounding cryptocurrencies on social media and an eventual increase in the price of Bitcoin, which as mentioned, will then go on to increase the overall price of the markets. Interestingly though, this increase did not come from the general crypto-public, instead. The increases noted only came when a ‘silent majority’ took to social media to discuss cryptocurrencies. According to The Economic Times (India):

“Comments and tweets from very active users did not move Bitcoin's price much at all. Rather, the silent majority - infrequent users who took the time to comment on the cryptocurrency's prospects - moved prices more, as much as ten times more, when they posted positive comments.” 

Moreover, a spokesperson from the team has said:

“Vocal users of social media may sometimes have a certain agenda, in this case hyping or boosting the price of Bitcoin because they themselves have invested in it. So, if most of the social messages around Bitcoin are generated by people who are biased, the sentiments on social media may not accurately reflect the currency's actual value.”

See more from the full report here- https://economictimes.indiatimes.com/markets/stocks/news/social-medias-powerful-silent-majority-moves-bitcoin-prices-study/articleshow/64745519.cms In essence, these findings suggest that price manipulation on social media does not come from crypto-experts with their finances already invested in to it. Instead, it is ‘crypto virgins’, those who are new to cryptocurrency and those whose opinions are not biased by their own financial interests. These are the people that seem to actually hold the power to manipulate Bitcoin prices through social media. Of course, this isn’t intentional, however it does prove just how volatile the markets are, if this is the case. This is a really cool piece of research, it gives us some greater insight into market manipulation and of course, for you ‘experts’ that are reading this, shaking your heads, you might think twice about putting somebody down on social media now, when you think their crypto knowledge isn’t adequate enough to have an opinion. (Always sticking up for the little guy!)

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