Should You Trust Crypto Twitter? Research Examines Influencer Impact

• Crypto Influencers’ Questionable Impact on Investment Returns
• FTC Report Prompts Scrutiny of Social Media’s Role in Crypto Scams
• Social Media: A Double-Edged Sword for Crypto Investors

A new study by three researchers questions the effectiveness of crypto influencers on Twitter in influencing investment returns. The research, as reported by Wu Blockchain, analyzed the return rates of cryptocurrencies following tweets from prominent influencers.

The study found that while there were initial short-term gains, averaging around 1.83% one day after a tweet, these returns quickly evaporated.

“The average return rate one day (two days) after the twitter sending was 1.83% (1.57%). The return rate of small tokens after one day was 3.86%. The average cumulative returns ending 10 and 30 days were -2.24% and -6.53%.”

This research was prompted by a June 2022 Federal Trade Commission (FTC) report that documented significant investor losses in the cryptocurrency market, with social media platforms identified as a major source of scams. The FTC report found that investors had lost nearly $1 billion since early 2021, with social media responsible for roughly ha…

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