Here’s the Issue With Crypto Personalities on Twitter

Alongside every crypto market surge, a similar surge of activity in cryptocurrency social media transpires. Popular crypto personalities benefit the most from this activity, gaining huge numbers of new followers. Some of their Twitter accounts have tens of thousands of followers, and sometimes more. These followers are very receptive to the content shared by these accounts, using these accounts’ tweets as major resources in their research.

These prominent individuals, who have branded themselves as successful traders, master analysts, and market gurus, highly publicize their insane profits in order to gain the trust of their followers. As a result, these accounts have a huge influence over their audience. While some accounts are what they brand themselves as, and do share valuable information, many more are actually earning their profits through the exploitation of naive individuals who trust them the most. Below are a few of the methods of exploitation many Twitter personalities employ which followers should be wary of.

1. Paid Groups

Paid groups are the most blatant method by which influential individuals profit off their supporters. The idea behind a paid group is simple: the account runs a private chat room that requires a single or recurring fee to join. Paid group administrators will tweet screenshots of tidbits from their chat room showing calls which resulted in massive profits. For the naive investor, a paid group may seem like a great deal; it appears to be an outlet for the best, most profitable trading calls, and surely the subscription should pay for itself many times over. Obviously, if the group operator did have all the best calls, he or she wouldn’t be sharing them with anyone, as he or she would know something nobody else did and would be making millions off it. In reality, the profits earned by the admin are the subscription payments he charges – usually hundreds or even thousands of dollars a month – to his or her tens or hundreds of paid group participants.

2. Referral Links

Referral advertising involves users advertising their referral link to a website (usually an exchange or ICO) with the hopes that audience members will follow their link and sign up at the destination. When users who sign up using this link deposit, trade, or buy, the referrer gets a cut of the registrar’s profits. Perhaps the largest incidence of referral advertising was the Mothership (MSP) crowdsale, where top referrers earned several BTC worth of MSP for hyping the Mothership project alongside a link to purchase coins. Currently, the most advertised referral program on crypto Twitter involves the cryptocurrency futures exchange BitMEX, which pays part of the trading fees accrued by traders to its referrers. Crypto personalities parade how much money they make trading futures, accompanied by their signup link. However, they fail to share that leveraged trading is very high-risk, and it’s likely that an inexperienced trader will quickly see all their deposits liquidated and lost.

3. Paid Shilling

Tweets, especially from very popular accounts, have a lot of weight attached to them. When @SecretsOfCrypto calls to buy a coin, it pumps 30% within minutes. He’s not the only one capable of moving prices so quickly, which is why there is a huge market for paid tweets. While a select few prominent crypto accounts will screenshot potential communications to promote transparency and alert their followers, most have made no comment on such communications. Of course, silence does not prove guilt, but it is logical to believe that most, if not all, popular crypto accounts have at least been contacted with these offers. To sort genuine advice from potentially paid shilling, look at the context of these tweets. Do they provide reasoning for their endorsement? Is it consistent with their past advice? Or is there no real logic presented? Of course, this is the most subtle of the three methods, and requires diligent research to ensure one does not fall prey.

Social media plays an important and helpful role in the cryptocurrency sphere, updating traders and supporters with new knowledge and breaking announcements more efficiently than other mediums. In general, there is a reason why certain accounts are so popular: they do have impressive track records, and they are veterans in the industry. However, like in any group, bad actors exist among these personalities, and it is important to remain skeptical, so as to not fall victim to any covert schemes.