Elon Musk tweets and Twitter bot spam influences altcoin prices: Study
Crypto-spouting Twitter bots could be playing a much larger role in artificially inflating the price of altcoins than previously understood, a new study has suggested.
Using a sample of various FTX-listed cryptocurrencies in a study published Aug. 2, the Network Contagion Research Institute (NCRI) said it analyzed over 3 million tweets posted between Jan. 1, 2019, to Jan. 27, 2023, surrounding 18 altcoins.
The study found that Twitter bot activity played a crucial role in amplifying the value of these cryptocurrencies, including The Sandbox (SAND), Gala (GALA), Gods Unchained (GODS) and LooksRare (LOOKS), with half of the coins showing signs of price influence as a result of tweet bot activity.
It also found that these inauthentic tweets would increase after FTX posted about the token on social media, which it said raises questions about whether FTX or Alameda Research could have played a role in coordinating the bot activity.
"In fact, for half of the FTX listed coins in the sample, inauthentic tweet volume showed signs of forecasting subsequent price. This suggests that inauthentic networks successfully and deliberately deployed to influence changes in FTX coin prices," it said, adding:
The study also looked into the impact of bot activity and Elon Musk's crypto-adjacent tweets on two recent memecoins, suggesting the prices of Pepe (PEPE) and PSYOP have been influenced by both these factors.
NCRI detected a surge of newly created bot accounts before the launch of PEPE — which all went on to tweet about one of the two coins.
Pepe Coin and PSYOP leveraged memes and were also boosted by two of Musk’s tweets that seemingly gave a nod to each of the tokens, the study said.
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