Study Finds Bots Inflating Price of Crypto Meme Coins on X Social Media Platform
A study conducted by the Network Contagion Research Institute (NCRI) reveals that bots on the social media platform X are playing a significant role in inflating the price of crypto meme coins. The study analyzed over 3 million tweets related to 18 altcoins over a period of four years. It found that more than half of the analyzed coins, including The Sandbox, LooksRare, IMX, Gods Unchained, and Gala, were influenced by inauthentic Twitter bot activities.
Key Points:
- The study found that 172,451 out of 182,105 accounts tweeting about FTX-listed coins were highly likely to be Twitter bots.
- Twitter activity amplified the value of FTX-listed cryptocurrencies, with bot-like accounts comprising about 20% of online chatter regarding these coins.
- For half of the FTX listed coins studied, inauthentic tweet volume showed signs of forecasting subsequent price, indicating deliberate bot deployment to influence price changes.
- Bot-like activities increased significantly after FTX posted promotional tweets about the listed altcoins, suggesting possible coordinated inauthentic activity.
- Elon Musk’s tweets also had a notable impact on the price of meme coins, with Pepe’s price increasing by over 50% after Musk’s tweet and PSYOP’s volume doubling after he retweeted a post.
Meme Coin Price Manipulation and Elon Musk’s Tweets
The study did not directly allege FTX’s involvement in meme coin price manipulation but raised questions about possible coordinated inauthentic activity. It also explored the impact of Elon Musk’s tweets on the price of meme coins Pepe and PSYOP. Musk’s tweets led to significant price increases and volume surges in these coins.
Hot Take
This study highlights the concerning role of bots in manipulating the prices of crypto meme coins on social media platforms like X. It is crucial for platforms like X to strengthen their account verification processes and utilize machine learning for bot detection to ensure authenticity. As cryptocurrency continues to gain mainstream attention, addressing the potential risks of market manipulation through social media is essential for investor protection and financial market stability.
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