Crypto-spouting Twitter bots may very well be playing a much larger role in artificially inflating the value of altcoins than previously understood, a latest study has suggested.
Using a sample of varied FTX-listed cryptocurrencies in a study published Aug. 2, the Network Contagion Research Institute (NCRI) said it analyzed over 3 million tweets posted between Jan. 1, 2019, to Jan. 27, 2023, surrounding 18 altcoins.
The study found that Twitter bot activity played a vital role in amplifying the worth of those cryptocurrencies, including The Sandbox (SAND), Gala (GALA), Gods Unchained (GODS) and LooksRare (LOOKS), with half of the coins showing signs of price influence consequently of tweet bot activity.
It also found that these inauthentic tweets would increase after FTX posted in regards to the token on social media, which it said raises questions on whether FTX or Alameda Research could have played a job in coordinating the bot activity.
“In fact, for half of the FTX listed coins within the sample, inauthentic tweet volume showed signs of forecasting subsequent price. This suggests that inauthentic networks successfully and deliberately deployed to influence changes in FTX coin prices,” it said, adding:
“It begs the query, did FTX or Alameda engage in coordinated inauthentic activity on social media to artificially inflate market values?”
Musk’s tweets impact PSYOP and PEPE
The study also looked into the impact of bot activity and Elon Musk’s crypto-adjacent tweets on two recent memecoins, suggesting the costs of Pepe (PEPE) and PSYOP have been influenced by each these aspects.
NCRI detected a surge of newly created bot accounts before the launch of PEPE — which all went on to tweet about one in all the 2 coins.
Pepe Coin and PSYOP leveraged memes and were also boosted by two of Musk’s tweets that seemingly gave a nod to every of the tokens, the study said.
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Musk’s May 13 tweet of a Pepe meme caused the token’s price to hop over 50% inside 24 hours.
Explaining Constitutional Amendments pic.twitter.com/oYkMPBe9Zi
— Elon Musk (@elonmusk) May 13, 2023
Alongside Musk’s tweets, account creation surges took place a day prior to Pepe’s April 17 launch which suggested an orchestrated effort to make use of bots to amplify the token’s popularity.
The study’s researchers said this phenomenon could also affect stocks and other securities. They pointed to the social media frenzy in 2022 surrounding so-called “meme stocks” comparable to Gamestop and AMC.
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