Depending on the individual user’s consumption of daily social media platforms it can affect both ways positively and negatively. Majority of the people in this current time heavily rely on social media applications for news, updates, businesses, entertainment and as a means of connecting with family, friends and the world.
It will come as no surprise that social media also impacts Cryptocurrency and Forex Trading in more than one way. Cryptocurrency is a digital currency based on blockchain technology available in decentralized networks and its transactions are secured and maintained using cryptography. Since it is already a virtual currency, data regarding its information and rates of these currencies are sensitive to social media discussions and happenings.
Initially when cryptocurrencies came into being they were not really popular and their prices were not that high, how can someone decide a virtual coin’s price? However, in recent years the value of cryptocurrencies has reached a new high which was a result of social media power. As more social media users got to know about this the more its value grew, they started discussions and groups to create its hype telling other people in their groups about its benefits and such. This made social media a huge influencer on the prices of cryptocurrencies. The rates of cryptocurrency fluctuate based on discussions going on various social media platforms such as Twitter, Reddit, Instagram and Facebook, regarding each cryptocurrency. These impact positively as well as negatively. In order to see how social media affects the rates of cryptocurrency we can look at the most recent events happening regarding cryptocurrency prices.
Elon Musk is a billionaire and CEO of two major brands Tesla and SpaceX, who took interest in cryptocurrencies last year and purchased $1.5 billion worth of Bitcoin, a leading and the most expensive cryptocurrency in the world right now, which in result caused major fluctuations in the cryptocurrency market and became a trending news. Followed by this, the news came that Tesla will not accept Bitcoin causing another fluctuation in the crypto market related to bitcoin. Sometimes even a simple meme tweeted by the billionaire about Bitcoin can impact the prices of this cryptocurrency. Because most of the social media users who are also crypto traders or investors get influenced by this news and start a discussion about the coin either in good way or bad, which in result impacts the prices of that cryptocurrency.
Similarly, another currency which gets influenced by Elon Musk is Dogecoin which became a meme cryptocurrency recently. It showed quite a growth in the start of 2021 and reached its peak value however after Musk failed to hype up about it while hosting SNL (Saturday Night Live) a popular show on American television, the coin’s price dropped by 75%. This is how much the media in general and social media specifically impact the crypto rate.
In other recent news, El Salvador became the first country to accept Bitcoin as a form of legal tender. This caused a great hype in the social media community as a movement was formed calling users on Twitter and Reddit to buy $30 worth of Bitcoin. Following this news, the Bitcoin surged up to $52,000, which was a new high for this coin since May. Crypto Traders use social media as their largest source of marketing and spread credible news revolving about cryptocurrencies.
The cryptocurrency market is still a growing market as still many people do not know about it yet, however more people are joining due to active promotions by crypto-brokers and other online crypto supporting platforms using social media sites as a must to engage and reach larger audiences. Many crypto-brokers have social media pages where they update news, information and knowledge regularly. Due to this marketing, major businesses are taking interest in cryptocurrencies and either already accept or are thinking about whether to accept or incorporate in their business or not. Since it is established that social media does play an important part in impacting the cryptocurrencies, crypto traders are advised to keep an eye on social media along with other major news while in this business.