Crypto Media and Crypto ‘X’ (formerly Twitter) dictate market trends more than we like to think. The crypto market continued its bearish trend in 2023, in part, due to the negative traditional and social media sentiment surrounding it.
This year, while crypto and Web3 projects were hunkering down on development and waiting for more favorable market conditions to push out their mainnet launches, fear uncertainty and doubt (FUD) stories were given more air time.
From the US SEC’s crackdown on crypto, crypto exploits, governance debates and the recent premature ETF rumours influencing the market – we learned that the media and Crypto X can powerfully sway market trends for the good and bad.
The Power of the Media
Media coverage holds immense influence over the crypto market. As proven by the two following examples from this year:
Fake ETF news
On 16th October 2023, Cointelegraph posted on Crypto X falsely claiming that the SEC had approved BlackRock’s iShares spot Bitcoin exchange-traded fund (ETF). This tweet unintentionally caused a 5% surge in the price of Bitcoin (BTC) within hours. This misinformation originated from an unverified screenshot shared by a Crypto X user, who claimed it came from the Bloomberg Terminal.
While Cointelegraph later issued an apology for this error, this incident demonstrates how important precise reporting is. The lesson here is simple: inaccurate news can have the same potential to sway the crypto market as accurate.
This blunder, however, turned out to be an omen for what was to come (as is quite often the case on Crypto X), because on 23rd October, BlackRock’s proposed iShare Bitcoin ETF was listed on the DTCC, hinting at SEC approval. During this period, Bitcoin price had seen a remarkable 9.8% surge, making its most substantial weekly increase since June 2023.
The SEC’s cryptic crypto campaign
The SEC’s relentless litigation against cryptocurrency exchanges and digital asset firms dominated headlines in 2023, not just in crypto trades but mainstream media too. The rumours surrounding what SEC Chair Gary Gensler might do, coupled with his actual actions, amplified by the media, had an immense impact on investor sentiment and market dynamics, while also casting a shadow on the reputation of the industry.
Gary Gensler revealed that the SEC filed over 780 enforcement actions in 2023, resulting in judgments and orders totalling $5 billion, of which $930 million was returned to affected investors.
The most notable example of the SEC and Gensler affecting markets this year is in June 2023 when news broke that the SEC filed against Binance and Coinbase just one day apart. As these lawsuits unfolded, the values of several cryptocurrencies experienced sharp declines, for example, Bitcoin’s value dropped by 6%, Ether lost 5.2%, and Binance’s native cryptocurrency, BNB, plunged by nearly 10%.
The Influence of Crypto X
Crypto X, despite its rebranding, changes and general tom-foolery, was still the main source of trend forecasting this year. It’s known to spread both reliable and unreliable information like wildfire, with many taking advantage of the social media platform to condemn, advocate and everything in between.
Researchers found that between the years of 2019 and 2023, more than 3 million tweets had the power to boost the prices of 18 different crypto projects. The report also referred to a tweet Elon Musk, owner of X, posted featuring Pepe the Frog memes on May 13th 2023 that caused a 50% increase in the price of PEPE coin in less than a day.
Another example of Musk using his platform to influence crypto is when he changed X’s (then Twitter’s) logo to Shibu Inu dog. This move caused the value of a meme coin to go up by a whopping $4 billion.
While the examples above may seem tied more to Musk than the platform itself, Crypto X is a well-known tool for driving real-world results for projects. Coinbase’s on-chain summer campaign on Crypto X contributed to the success of the social app, Friend.tech, generating over $1.04 million in protocol fees in 24 hours.
Looking Forward to 2024
In light of the significant influence the media and Crypto X wield in shaping market dynamics, having a strategic communication and PR plan has become increasingly important for crypto projects and leaders as they navigate the industry. When we look toward strategizing for 2024, it is important to note that it is possible to shape the crypto narrative, and by extension the market. If productive project launches, integration announcements and fundraisers dominate the media headlines – the sentiment toward crypto will in turn be positive and productive.
Well-crafted announcements and strategic media stories amplify visibility and credibility for crypto projects and leaders in the industry. 2024 is the time to get ahead of the narrative because when the market picks up (and it will pick up) projects that have established themselves with good press and sentiment in general will be the go-to reliable sources to speak about crypto market sentiment and direction.