- The report by NCRI highlighted that the growth of cryptocurrency has increased the potential for market manipulation through bot price predictions.
- Memecoins led by PEPE and Psyop (PSYOP) have also been identified to be under the influence of inauthentic amplification.
The mainstream growth of the cryptocurrency market has come with its fair share of challenges. Spreading the word to as many people under a budget is crucial for most projects that launch on different blockchains. A recent study conducted by the Network Contagion Research Institute (NCRI) concluded that the X platform (formerly called Twitter) has been used over the years by computer bots to amplify the value of different crypto assets.
The study closely relates to claims by billionaire Elon Musk that Twitter was largely overcrowded by bots before he purchased the social media platform. Musk has, however, implemented several measures to reduce the dominance of bots on the X platform in a bid to make it the world’s largest financial ecosystem.
Closer Look at the NCRI Report on Spamming Bots on X Platform
The report by NCRI highlighted that FTX-listed crypto tokens were heavily amplified by the speculative bots on Twitter. Reportedly, the collapsed cryptocurrency exchange, which wiped out more than $32 billion, heavily relied on Twitter to reach out to its audiences. However, the report by NCRI noted that FTX-promoted tweets were immediately followed by a 50 percent spike in inauthentic activities. Notably, the figures were derived from analyzing more than 3 million tweets posted between January 1, 2019, to January 27, 2023, mostly involving 18 altcoins.
“In fact, for half of the FTX listed coins in the sample, inauthentic tweet volume showed signs of forecasting subsequent price. This suggests that inauthentic networks were successfully and deliberately deployed to influence changes in FTX coin prices. It begs the question, did FTX or Alameda engage in coordinated inauthentic activity on social media to artificially inflate market values?” The report noted.
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Notably, former FTX boss Sam Bankman-fried, who currently faces fraud charges in the United States, has been accused of funds misappropriation, including in costly marketing events. The NCRI further noted that out of a total of 182,105 unique accounts that tweeted the listed crypto coins on FTX, about 172,451 accounts were given bot scores. Interestingly, the accounts that were not given bot scores were likely accounts that had since been suspended by Twitter, whereby approximately 11,215 accounts were deemed to be inauthentic.
The report also highlighted that the inauthentic promotion of crypto assets has been going on in the past few months. The report noted that meme coins PEPE and PYSOP have been significantly influenced by inauthentic promotion using Twitter bots.
Bigger Picture
Twitter is used by most cryptocurrency traders and influencers to get the latest industry updates. The use of inauthentic bot promotion is undeniably affecting the free markets amid increased fraudulent blockchain activities and rug pulls. Nonetheless, experts believe the education of investors will significantly reduce the effects of inauthentic promotion as utility and real market value influence the crypto market.
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