Social Media Bots Boosted FTX-Listed Coins, Says Report
New analysis from the Network Contagion Research Institute (NCRI) reveals that bots on the social media platform X (formerly Twitter) likely played a major role in amplifying the value of cryptocurrencies tied to the now-defunct FTX exchange and its sister firm Alameda Research. The report highlights the following key points:
- Bot-like X accounts made up around 20% of online chatter about FTX-listed coins
- Inauthentic social media activity effectively forecasted price changes for half of the FTX-associated coins examined
- FTX promotions on X immediately preceded surges in the coins’ values
- Abnormal account creation patterns and predictive links between bot posts and price changes were detected in recently launched crypto tokens like PEPE
- The FTX-listed coins SPELL, IMX, GALA, RNDR, and BOBA were involved in manipulative behavior through inauthentic social media activity
The NCRI report concludes that the manipulation through bots and fake social media accounts poses major risks to investors and financial stability in the cryptocurrency market. The researchers emphasize the need for greater transparency and oversight in order to address the volatility and deception facilitated by platforms like X.
Hot Take
The use of social media bots to manipulate cryptocurrency markets is a concerning trend that undermines the integrity of the industry. It is crucial for regulators and platforms to crack down on such manipulative practices to protect investors and maintain trust in the market.
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