Study: Crypto Influencers’ Tweets Lead to Short-Term Gains, Long-Term Losses
Scientists from Indiana University, Harvard Business School, and the University of Texas conducted a study to assess the impact of crypto influencers’ tweets on the behavior of their followers and token prices. The results turned out to be alarming for those who rely on recommendations from influential figures in the crypto sphere.
Short-Term Price Spikes and Long-Term Losses
The analysis showed that crypto influencers’ tweets cause a short-term price increase of tokens by an average of 2% in the first two days after publication. However, a month after such recommendations, asset prices drop by nearly 7%. This indicates that short-term price spikes do not always lead to long-term gains.
Decrease in Positions Based on Influencer Signals
Additionally, Chinese journalist Colin Wu found that positions opened based on signals from crypto influencers on the X social platform (previously known as Twitter) show a decrease of 2.20% after 10 days and 6.50% after 30 days.
Regulatory Scrutiny and Caution Advised
These findings have caught the attention of regulatory authorities in various countries. In the USA, the Securities and Exchange Commission (SEC) has already charged Kim Kardashian and Floyd Mayweather Jr. for promoting the EthereumMax token, the value of which dropped after their recommendations. In Europe, the new Markets in Crypto-Assets Regulation (MiCA) also includes criminal liability for celebrities for manipulating retail investors.
The study emphasizes the risks associated with crypto influencers’ recommendations and urges investors to exercise caution when relying on short-term signals from popular figures in the crypto world.
