A rising variety of enterprise leaders and celebrities — e.g., Elon Musk, Jack Dorsey, Alex Ohanian and, most not too long ago, Ricardo Salinas — have added the Bitcoin hashtag to their Twitter biographies. It hasn’t gone unnoticed. When Elon Musk added #Bitcoin to his bio in late January, Bitcoin soared by 20%.
If certainly a succession of billionaires and tech moguls have taken the Bitcoin pledge — no matter which may entail — what’s their motivation? Are they making an attempt to control the market, as an example — or promote their model?
Might they be simply trying to pull the collective leg of crypto’s true believers? The CEOs, alternatively, could possibly be lethal earnest: signaling the technological future they imagine is coming to move — e.g., world and decentralized.
Regardless of the motive, it appears truthful to say that social media has been tilting Bitcoin’s (BTC) worth proposition not too long ago, and it raises some questions. For instance, are cryptocurrencies extra inclined to social media messaging than different monetary property?
BTC and social media — Joined on the hip?
Rightly or wrongly, many customers decide BTC’s success by its every day market value, and that value appears extra entangled than ever with social media exercise.
“Completely,” Feng Mai, an assistant professor at Stevens Institute of Know-how’s College of Enterprise, commented to Cointelegraph. “My research has proven that Twitter posts from influencers have an instantaneous impact on BTC pricing.” That is for 2 causes, Mai defined: “Its lack of intrinsic worth in comparison with different monetary property, and its adopters’ demographics overlapping with social media customers.”
Neil Wilson, chief market analyst for Markets.com buying and selling, added that cryptocurrencies — like another property that occupy comparatively small pockets throughout the total investing market, e.g., GameStop — appear notably susceptible to social media as a result of they’re comparatively illiquid with giant holdings within the arms of comparatively few individuals, and likewise as a result of they’ve “a crowd/cult following.”
Lennard Neo, head of analysis at Stack Funds — a crypto index fund supplier — informed Cointelegraph that whereas social media doesn’t change BTC’s “foundational worth proposition,” which stays stable, “the tweets act like accelerators.”
Finn Brunton, professor of science and expertise research on the College of California, Davis and creator of Digital Money: The Unknown Historical past of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency, informed Cointelegraph BTC and social media have been intertwined since Bitcoin’s origins.
In response to him, “Bitcoin has at all times been a social media motion first and a working foreign money second — pushed by testimonials, stunts, memes and exhortations to HODL and imagine.” In that sense, the worth of BTC skyrocketing as a result of a voguish CEO modifies their Twitter bio “is totally on model.”
Is superstar consideration good for BTC?
On the face of it, the well timed addition of #Bitcoin to the Twitter bios of tech CEOs, resembling Dorsey, Ohanian and Musk, would appear to be a plus, garnering extra consideration for Bitcoin and finally rising acceptance and adoption. Wilson informed Cointelegraph:
“The rising company assist we’re seeing for Bitcoin is essential within the value resurgence over the previous couple of months. Tesla’s transfer is the sort of huge company assist that bulls are latching on to. Extra company assist equals extra mainstreaming, higher acceptance. Community impact is vital right here.”
“Musk and Tesla embracing Bitcoin is nice information for the cryptocurrency,” Mai added, “in that it lends credence to cryptocurrency as a medium of change, which is among the key features of cash based on economists.”
However don’t these social-media turbo expenses additionally make BTC’s value extra erratic — with volatility lengthy being cited as one of many cryptocurrency’s fundamental drawbacks? When billionaire Salinas, Mexico’s third-wealthiest man, added #Bitcoin to his Twitter bio at first of February, as an example, the worth of the highest crypto asset surged over $40,000 for the primary time in 23 days.
Mai answered that the entry of enormous corporations like Tesla greater than offsets any short-term volatility, and the massive firms will make Bitcoin much less risky: “The corporations that settle for BTC ought to now have extra incentive to stabilize the worth of BTC — they don’t need their income fluctuating considerably day-to-day.”
Relating to the latest hash-tagged bios, Brunton, not precisely a BTC bull, commented: “It’s good for Bitcoin in that extra buy-in from wealthy guys equals extra events invested in preserving this leaky raft afloat.” In his view, a greater long-term consequence, nonetheless, could be for customers emigrate from BTC to cryptos “that work higher, are higher engineered, or have superior implementation.” Bitcoin, he added, “is the alpha rollout of what cryptos could possibly be, so the extra sunk price there may be, the longer we’ll be caught with it.”
Not only a Musk whim?
When Elon Musk added #Bitcoin to his Twitter bio on Jan. 29, the impact on BTC was flammable — the price rallied 14% within the first half-hour. However not all followers have been fully clear concerning the world’s richest man’s intent. Was he simply joshing along with his 43 million Twitter followers? The addition of a cryptic tweet — “Looking back, it was inevitable” — solely deepened the anomaly.
The image turned clearer, nonetheless, on Feb. 8 when it was broadly reported that Tesla had not too long ago bought $1.5 billion of Bitcoin, which is but to be revealed. Clearly, Musk’s curiosity in BTC had been real. Musk has since eliminated #Bitcoin from his Twitter bio. Wilson informed Cointelegraph:
“Now we all know not solely is Musk on aspect however Tesla is backing on a company degree — the technique was authorized by the board and audit committee. That is essential since it’s not only a Musk whim however a ‘critical’ company funding.”
Brunton was much less tolerant of Musk, whom he referred to as an “A-1 s—poster who additionally occurs to be a billionaire.” That mentioned, based on him, “#bitcoin is certainly a part of the Reddit-style starter pack of tech-baron way of life trappings and shows. That’s a couple of tradition and a scene, although. It has nothing to do with ‘expertise’ as such.”
Elsewhere, it’s been urged that Bitcoin-hash-tagging CEOs have been simply using social media to advertise “their model as a crypto-friendly agency and getting a ton of free publicity.” Neo, for his half, believes that markets are presently overextended, “and there are undoubtedly revolters on the market who’re simply tweeting for ‘enjoyable’ at individuals’s bills.” Throughout such occasions, “it’s much more essential that we train warning, make investments rationally and never emotionally,” he informed Cointelegraph.
Is Bitcoin expertise’s new flag?
In the meantime, Balaji Srinivasan, angel investor and co-founder of Coin Middle — a nonprofit crypto coverage advocate — previously has suggested that Bitcoin is turning into the brand new “flag of expertise” representing high-echelon financial values resembling decentralization and internationalism.
Among the many implicit values in Bitcoin’s expertise, as he wrote elsewhere, are: “internationalist, capitalist, decentralized, hyperdeflationary, networked, encrypted, digital, risky, bold, and quietly revolutionary.”
So, is that what’s going on with the #Bitcoin motion: CEOs simply waving the brand new “flag of expertise,” desirous to determine themselves with a nonetheless coalescing decentralized future?
“It [BTC] is the flagship of all cryptocurrencies and represents the various values inherent within the expertise,” answered Jay Hao, CEO of OKEx crypto change, although it typically means various things to totally different individuals:
“It could characterize freedom for one individual, effectivity for an additional […] a life raft, a speculative asset, a retailer of worth and so forth. An individual who has seen his life financial savings worn out by hyperinflation and is utilizing BTC as a way of protecting future wealth will see the flag of Bitcoin otherwise from a day dealer or institutional investor.”
Wilson informed Cointelegraph: “I feel Bitcoin has at all times been a motion to an extent — it’s about decentralization and ‘taking again management’ from central banks, governments, and many others.” Dallas Mavericks proprietor Mark Cuban went even additional, telling Forbes in December that Bitcoin is “extra faith than resolution to any downside.”
A social motion with shared high-level beliefs? Brunton remained skeptical: “Bitcoin is — and has at all times been — a number of conflicting social actions awkwardly kludged collectively round a foreign money and a transaction infrastructure.” He additional added that beliefs round what Bitcoin is are totally different for individuals like speculators, libertarians, anti-statists and so forth, concluding: “To say that anybody holds widespread beliefs by holding BTC is a class error.”
Neo informed Cointelegraph: “Flag or not, to the lots on the market, it isn’t only a matter of funding but additionally an announcement that they assist the actual ecosystem or an asset.”
On the journey to mass adoption
Regardless of the clarification behind the proliferation of #Bitcoin in Twitter bios, most Bitcoinists are in all probability inspired by it, whereas acknowledging that it stays a sideshow at finest.
As Hao informed Cointelegraph, BTC “has been gaining traction steadily through the years — lengthy earlier than main enterprise executives arrived ‘late to the get together.’” The hashtags are a “good gesture,” one other signal that BTC is turning into a motion, however in the long run, Hao added, that is simply one other step alongside the “journey to mass adoption.”