A recent study conducted by the Network Contagion Research Institute (NCRI) has shed light on the significant impact of Twitter bot spam on the prices of various altcoins, suggesting that this phenomenon might be more pervasive than previously thought. The research, which focused on a selection of FTX-listed cryptocurrencies, analyzed over 3 million tweets spanning from January 1, 2019, to January 27, 2023, involving 18 different altcoins.
The study uncovered a crucial connection between Twitter bot activity and the valuation of these altcoins, including coins like The Sandbox (SAND), Gala (GALA), Gods Unchained (GODS), and LooksRare (LOOKS). Notably, approximately half of the studied coins displayed signs of price influence attributed to tweet bot activity.
Furthermore, the research raised concerns about potential coordination between FTX or Alameda Research and the observed bot activity. Instances of inauthentic tweets seemed to escalate following social media posts by FTX, prompting speculation about the involvement of these entities in orchestrating the bot behavior.
Explaining Constitutional Amendments pic.twitter.com/oYkMPBe9Zi
— Elon Musk (@elonmusk) May 13, 2023
The study also delved into the effects of Elon Musk’s tweets on two specific memecoins, Pepe (PEPE) and PSYOP. The researchers observed a surge in newly created bot accounts before the launch of Pepe, with these accounts subsequently tweeting about either of the two coins. Musk’s tweets, which referenced these tokens, also contributed to their price fluctuations. For instance, Musk’s May 13 tweet featuring a Pepe meme led to a remarkable 50% price surge within a mere 24 hours.
Drawing parallels to the impact on traditional markets, the study’s authors suggested that similar bot-driven phenomena could potentially affect stocks and other securities. The researchers pointed to the frenzy surrounding “meme stocks” like GameStop and AMC on social media in 2022 as a precursor to this type of influence.
In a broader context, the study highlights the intricate interplay between social media, Twitter bots, influential figures like Elon Musk, and the cryptocurrency market. The findings underscore the need for vigilant monitoring and regulation to ensure the integrity of market dynamics.
As the crypto space continues to evolve, this study serves as a reminder of the complexities and challenges in maintaining a fair and transparent marketplace.