From TikTok to X: How social media influences Crypto Assets investment decisions and price movement

In the Crypto Assets market, price Fluctuation is driven not only by technical aspects and macroeconomics but also by social media, which has become another powerful force. From TikTok, X (formerly Twitter) to Reddit and Discord, these platforms have become the core hubs for millions of investors to exchange information, share opinions, and even influence market sentiment. For Newbies, these communities serve as a guide to entry; for the market, they may be the trigger for drastic price Fluctuation.

Social media has become the hub for encryption messages

(Source: Ofcom)

A survey by Ofcom in the UK shows that 52% of adults get their news through social media, with the proportion even higher at 82% among the 16-24 age group.

TikTok: In 2020, only 1% of adults in the UK used it to get news, but now it has reached 11%.

Crypto Assets Popularity: The UK's Financial Conduct Authority (FCA) estimates that by 2024, 7 million adults (12%) will hold Crypto Assets, up from 10% in 2022.

Source of investment decisions: 28% of crypto buyers rely on social media for research, 38% use online forums, and 36% listen to advice from friends and family.

However, 10% of people admit that they did not do any research before investing, showing that the influence of social media coexists with risks.

From Meme Packs to Price Fluctuation

The influence of social media is not limited to information dissemination; it can also directly trigger market fluctuations.

Celebrity Effect: Studies show that Musk's tweets have a statistically significant impact on the price and trading volume of Dogecoin (DOGE).

Short-term speculation: The "price manipulation" incident promoted by account X often leads to short-term surges and social discussions.

Meme coin frenzy: A TikTok "hidden gem" video or a bullish post on X can ignite buying pressure within hours.

The Value of Community: Knowledge Sharing and Emotional Support

Unlike the closed research of traditional financial institutions, community platforms bring together developers, enthusiasts, and independent researchers:

Reddit r/CryptoCurrency: With over 9 million members, it is a daily discussion forum for blockchain upgrades, trading strategies, and market observations.

Newbie Guide: Acquire Basic Knowledge, Long-term Values, and Tips to Avoid Panic Selling

Emotional Support: During market fluctuations, the community can provide investors with psychological comfort and a sense of belonging.

Potential Risks: Hype, Fraud, and Information Bias

The openness of the community also makes it a breeding ground for scams and manipulation:

Token Pumping: Chainalysis found that 24% of the new tokens issued in 2022 exhibit characteristics of "pumping and dumping."

Conflict of Interest: Paid promotions or insider holdings are often packaged as "independent analysis".

High incidence of fraud: A report from the London City Police shows that Crypto Assets are the most commonly claimed investment target by fraudsters, accounting for 66% of all investment fraud reports.

How should investors respond?

Diverse sources of information: Do not rely solely on a single community or influencer.

Verify the authenticity of the message: cross-reference multiple reliable sources.

Beware of excessive hype: remain skeptical of "guaranteed doubles" or "hidden gems".

Risk Management: Even when coming from a trusted community, stop-loss and position control should be set.

Conclusion

Social media has deeply embedded itself in the Crypto Assets investment ecosystem, serving as both a treasure trove of information and support, as well as a breeding ground for speculation and scams. For investors, the key is to make good use of the power of the community while maintaining independent thinking and risk awareness. In this era where "a single tweet can ignite the market," rationality and vigilance are the best weapons to navigate through bull and bear markets.