Social media has the power to affect many things. Social media websites and apps are tools that people use to communicate with friends, discuss their interests, and find community. So it’s not surprising that the things that people talk about and share through social media can affect things in the “real world”. But one potentially surprising thing that’s influenced by social media is the price of cryptocurrencies. People are always likely to discuss investments using social media, but the connection is stronger with crypto. Younger people are big users of social media and are more likely to invest in crypto, increasing the influence that social media has on digital currencies.
The Link Between Social Media and Crypto
Social media is used as a platform to convey information about crypto. It’s used to talk about what’s happening in the crypto world, as well as to promote content covering cryptocurrency. One of the reasons crypto became linked with social media is due to content creators being drawn to it. Crypto offers a way for content creators to make money from their work. Now that both social media and crypto have grown, social media has the ability to affect crypto both positively and negatively. What people are saying on social media can influence the choices that people make in investing and can lead crypto prices to go up and down.
Trending Topics
One of the times when the influence of social media on crypto is particularly noticeable is when a social media trend starts to emerge. Trends on social platforms can influence investor behavior, leading to price rises or perhaps drops. For example, a trend on TikTok contributed to a rise in the price of Dogecoin (DOGE) in 2020. Meanwhile, an announcement from Elon Musk that Tesla had bought $1.5 billion of bitcoin and that they would be accepting bitcoin for purchases caused the price of the currency to hit an all-time high.
Crypto News
Social media is used to spread news too. Trending stories about big crypto news can influence buying and selling choices, causing price fluctuations. When Bitfinex, an exchange based in Hong Kong, was hacked, the value of bitcoin dropped by a huge 20%. Social media has the potential to affect crypto positively, but it can also have negative consequences, causing both large rises and falls in price.
In fact, social media is the first place that many people head to when they want the latest crypto news. Even professional journalists will visit places such as Reddit when they want to know what people are talking about and what the next big thing is. Many trending stories covering crypto start off as Reddit threads before hitting various publications and spreading through other social media channels.
Social media is sure to continue to be closely linked to cryptocurrencies. People will use social media to talk about what’s happening in the world of crypto and crypto will be influenced by what people are talking about on social media.
