The social gold rush—tales from the crypto

In the last year or so, the cryptocurrencies market has seen significant fluctuations, which, according to research published in the International Journal of Blockchains and Cryptocurrencies, has led to a surge in influencer activity on social media.

Sijie Yu and Jon Padfield of Purdue University in West Lafayette, Indiana, U.S., point out, however, that despite this increased activity there has been little academic research into the behavior and impact of cryptocurrency influencers.

The team has endeavored to fill this gap in our knowledge and has looked at how such influencers—usually individuals, but sometimes organizations, with large numbers of highly engaged followers on social media—affect perception and use of cryptocurrencies.

The researchers have explored the classification and impact of influencers based on various metrics such as platform statistics, psychological traits, update content (specifically on the X platform formerly known as Twitter), social connectivity, and cryptocurrency price fluctuations.

The researchers have also looked at how decentralized social media platforms have emerged following the change of Twitter ownership and its rebranding as X. Their review highlights some of the unique monetization models that shape influencer activities.

The way in which the cryptocurrency landscape has changed recently with financial approvals, settlements, news platforms, and novel approaches has led many people to turn to influencers for information and advice. Many of these influencers have such large followings and such sway that their online pronouncements are known to affect digital currency values, the value of digital assets known as NFTs (non-fungible tokens), and influence market trends.

The researchers point out that, given the influence of such individuals, there is a lot of interest in the ethical and legal aspects of their activities. Much of their behavior may be beyond the grasp of regulators, but some are being called to account when they fail to declare conflicts of interest in promoting schemes and assets.

The current review offers policymakers, regulators, and enforcement a detailed technical guide for profiling and identifying cryptocurrency influencers. This will allow them to analyze influencer social media content in a more informed manner and so apply the law forcefully.