A new study conducted by the Network Contagion Research Institute (NCRI) has found evidence that Twitter bot accounts may have influenced the prices of digital assets listed on FTX, a now-defunct cryptocurrency exchange, and traded by its hedge fund arm, Alameda Research. The study analyzed over three million tweets between January 2019 and January 2023 that mentioned 18 cryptocurrencies previously listed on FTX.
The study highlights the influence of Twitter on crypto prices and refers to a statement made by Sam Bankman-Fried, the former head of FTX, in which he recognized the power of social media in determining perceived value and inflating market capitalizations. Bankman-Fried’s explicit mention of Twitter suggests that he was aware of its influence on the cryptocurrency market.
The research questions whether FTX engaged in a Twitter scheme to manipulate crypto markets. The NCRI researchers found that bot-like tweets had an impact on token prices, raising suspicions of coordinated inauthentic activity on social media to artificially inflate market values. The study suggests that the intensification of social media activity surrounding the 18 tokens was not solely an organic outcome of their popularity but potentially a strategic ploy to influence market sentiment. Contrary to common belief, the study found that tweet volumes were not only influenced by price variations but also affected them in return.
The study reveals that “inauthentic, bot-like comments” about the 18 tokens increased over time following FTX’s promotion of these digital assets. The 18 cryptocurrencies examined in the study include Render (RNDR), The Sandbox (SAND), Immutable (IMX), and Gala (GALA). The researchers note that bot activity seems to have risen significantly after FTX’s official promotion, suggesting that the exchange’s endorsement played a catalytic role in attracting inauthentic amplification. Additionally, the study indicates that the proportion of inauthentic comments in overall chatter about these tokens significantly increased over time.
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Sam Bankman-Fried, the former head of FTX, currently faces numerous charges related to the collapse of the exchange in November. These charges include allegations of defrauding customers and mishandling billions of dollars worth of their funds.
It is important to note that the findings of this study do not constitute investment advice. Investors are encouraged to conduct thorough due diligence before making high-risk investments in Bitcoin, cryptocurrency, or digital assets. The NCRI research sheds light on the potential manipulation of the crypto market through social media but should be considered alongside other factors when making investment decisions.
As with all investments, there are risks involved, and individuals should proceed with caution. The Daily Hodl, where the study was reported, serves as a platform for news and information but does not recommend the buying or selling of any cryptocurrencies or digital assets. The publication also participates in affiliate marketing.
In conclusion, the NCRI study provides insights into the possible influence of Twitter bot accounts on cryptocurrency prices listed on FTX. The research highlights the awareness of social media’s impact on the market by the former head of FTX, Sam Bankman-Fried. It raises questions about the involvement of FTX and Alameda Research in coordinated inauthentic activity to manipulate market values. However, it is essential for investors to conduct their own research and exercise caution before making investment decisions in the crypto space.
