How Not to Be Influenced: A Guide to Crypto Social Media
Noun: the capacity to have an effect on the character, development, or behaviour of someone or something, or the effect itself.
Influencer Marketing – A Recent Phenomenon?
Influencer marketing is nothing new. Celebrities or high profile figures have always been used to promote or endorse products. In fact, according to Campaign India, celebrity advertising is actually around 250 years old! In the 1700s, the royals would endorse and show off high quality branded pottery and in the 1800s “trade cards” were introduced, where an actor or sports star would be pictured in a photo with the product.
Social media influencer marketing is just the latest form of celebrity endorsement or advertising. From an advertisers perspective, there is no easier or quicker way to reach a mass market, highly defined audience then to use a celebrity’s social media account which has hundreds of thousands of followers.
This new type of marketing has also seen services such as Postforrent, which specialises in bringing brands and influencers together and allows for monetisation of a large social platform. In addition to this, Cristiano Ronaldo recently promoted a university course where students could get a degree in how to become a social media influencer!
So where does Crypto fit into this? Crypto is no different from any other product or service. It’s safe to say that Crypto audiences are the most defined you could imagine. If you took a random sample of a high profile crypto personality’s following, I’d be very surprised if you saw anyone in there that wasn’t deep in the space. After all why would you follow the “Crypto Parrot” if you weren’t interested in blockchain?
Therefore, influencer marketing in Crypto is a very common occurrence. There are advertisements everywhere, whether it’s someone talking about a project or a trader posting trade setups with the end goal of starting a paid group. Some do this for personal gain, others to sustain their businesses. The Daily Chain for example works with Crypto companies to produce objective content and so some of our content is sponsored. We always announce this on Twitter, tag the content with a disclaimer and also put the companies we are working with on our Media Partner page.
We try to be as objective as we possibly can be by just stating facts and offering no opinion, but ultimately this content is still paid. It’s because of this that you have to treat every tweet or article you see that mentions a coin or a product with a level of cynicism and skepticism.
Even at the highest level, people like Anthony ‘Pomp’ Pompliano who tweets nothing but extremely bullish and positive things about Bitcoin on a consistent basis are themselves highly invested and it’s essential that this asset performs well in his investment company Morgan Creek’s digital portfolio.
High profile Bitcoin maximalists who have been around for years and are saying that BTC will go to $1 million most likely bought their Bitcoin when it was extremely cheap compared to where it is now, so it’s in their best interest to continue pumping out bullish news and getting people in a buying frenzy.
I’m not saying they don’t believe in the technology and the potential it possesses, but it doesn’t hurt to keep in mind that the people who try these tactics to whip up the masses may have that ulterior motive.
It’s also important at this point to state that you should never assume that someone with a large following knows what they are talking about. They could have got lucky in the bull market, bought followers or just played the Twitter game of posting hyped up tweets that prey on vulnerable and impressionable people’s emotions.
But let’s stop and think about it for a second and be honest with yourself. When you just started in this space, what was the ratio of tweets you did on coins you actually held and ones you didn’t? Truthfully honest I only tweeted about coins I personally held for a good year or so. Why? Because I wanted them to perform well as I was personally invested and it would have helped my portfolio. If I didn’t start The Daily Chain and have to remain more neutral and objective, I probably would still by doing this under the Twitter handle “CryptoSlothy”.
With this in mind you can start applying it to all coins and projects you see.
Your job, as an investor, is to remain fully impartial when confronted with a potential opportunity. You have to be cold, calculated, and look at all the facts and figures to make your own decisions about whether this is worth spending some of your hard earned money on.
Do Your Own Research
The old adage of DYOR, Do Your Own Research, should always apply.
We try to provide as much education as possible on The Daily Chain to remain protected and this article by Kristen Colwell highlights how you can begin to think more critically when it comes to analysing projects.
Alex Aves also brilliantly highlights 9 key steps to finding a great crypto project in this article.
It’s your decision on what to do with your money. You’re the one who put the work in to get it so be sure that you take your time on how you’d like to use this in the crypto space.
I’ve already talked about confirmation bias in a previous article and how, as an investor, you like to create an echo chamber for your investment by surrounding yourself or following people who only talk positively about the project you are invested in. This is a trap and to stay as objective as possible, you must listen to both sides of the argument.
Look for objective reviews and analysis on a project to weigh up both the pros and cons. Our Blockfyre reports are the ideal place to start with this. Check some of them out on the site noting the positives and negatives on the coin throughout.
Ultimately, you have to take responsibility for your own actions. This way you will be more inclined to fully research a project and you won’t have the easy get out of blaming someone else because you saw “Crypto Sausage” who has 40,000 followers talking about it and saying it was the next best thing since sliced bread.
If you see George Clooney advertising Nespresso, you don’t go out and immediately buy a coffee machine. You go on a few different websites, check out the user reviews, figure out if it’s actually in your price range, see if there are better opportunities out there etc..
The same way in Crypto if you see someone talking about a project you shouldn’t blindly jump in. Read some reviews, jump in the social media channels and talk with community members, ask questions of the admins, watch interviews with the team, analyse the tech and see if it really is necessary and if the project has the team to follow up on the roadmap.
But we’re all guilty. I can tell you from personal experience that I have spent more time in the supermarket looking at which brand of bread to buy then I did when I blindly market bought some coins back in 2017 when I saw someone tweet about it on Twitter! It takes a while to learn but there is a lot of good information out there now.
Similarly, if a trader with a large following posts a trade setup it’s not a signal to immediately buy. It’s just a signal and you should use your own skills and knowledge to determine whether or not this is a good trade and whether you want to take it based on your trading style. A recent post from our friend Brandon of ElevateUX (PostyXBT), shows what can go wrong if you blindly follow advice with no plan.
With no plan in place, this person will most likely end up losing money and most likely blaming Posty if the trade doesn’t work out.
Scott Melker, a renowned trader and columnist for CoinTelegraph, recently gave his opinion on this matter:
My opinion is that he hits the nail on the head here. Unfortunately, the cold hard truth is that Crypto remains a wild west. It’s full of hackers, con artists and scammers looking to make a quick buck or steal from unsuspecting victims. We have seen this time and time again over the years and it shows no signs of slowing down. It’s therefore imperative to be hyper vigilant with your own security, trading and investments.
The best thing you can do is to seek out facts and truth and learn to ignore the shill and hype posts that you come across.
If there’s one thing that the Crypto space always guarantees, it’s that everyone can be wrong.
At The Daily Chain, our focus is to inform and educate so that people can succeed in this space. With this in mind, be sure to check out our guides, articles and trading information in our education section in order to protect yourself and your capital as much as possible.
Thank you for reading.
The Daily Chain
Inform. Educate. Succeed.