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What Impact Do Twitter Influencers Have on Crypto Prices?

6 mins
28 January 2021, 04:32 GMT+0000
Updated by Ana Alexandre
28 January 2021, 08:41 GMT+0000
In Brief
  • BeInCrypto spoke with Olivier Kraaijeveld and BDCenter Digital.
  • BDCenter Digital carried out extensive investigations into the issue, from 2018 to June 2020.
  • Kraaijeveld sees the impact of Twitter influencers on crypto prices more like a side-effect of sharing thoughts and ideas of the crypto universe itself.
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Both crypto traders and hodlers often wonder what factors actually influence crypto prices. With this knowledge, they can build a more complete picture of potential risks, losses, and profits. One contributing factor is undoubtedly Twitter, and in this article we delve deeper into what impact Twitter influencers have on crypto prices.

To what extent do a myriad of voices speaking out for and against bitcoin (BTC), altcoins, and stablecoins influence their prices? Do prices change following influencers’ tweets, or do influencers tweet in the wake of price changes?

When we talk about the impact Twitter influencers potentially have on crypto prices, the main focus shifts to evaluating public sentiments circulating on the social media platform

Influencers: turning opinion into a profession

The hope for unprecedented profits is certainly a motivation behind many investments. Even those who do not necessarily hodl bitcoin or altcoins but have just started exploring the wild world of cryptocurrencies, have apparently dealt with various market influences when it came to crypto trading.

There are a variety of crypto influencers on Twitter — from blockchain experts to bitcoin maximalists, to professional traders. Every day, they spread their knowledge and opinion on the social media platform. Taking a stand is very important to influencers as it helps define their own target group and sell their services or products.

But what impact do Twitter influencers actually have on cryptocurrency prices?

Marketing and PR services company BDCenter Digital carried out extensive investigations into the issue, from 2018 to June 2020. Researchers analyzed over a million tweets from over a hundred influencers selected through a set of specific criteria.

The accounts had to have at least 10,000 followers and not belong to a specific crypto or blockchain project. Furthermore, they had to post at least one to two tweets a day, act informatively, and have active followers.

Researchers selected accounts with an engagement rate of over 500% for the study. The engagement rate was an important factor in the research. While the “whale accounts” showed far less engagement, it was mainly the accounts with 50,000 to 100,000 followers that demonstrated the highest interaction. 

Searching for connections between influencers and price movements

BDCenter told BeInCrypto that when measuring Twitter influencers’ impact on crypto prices, the main hypothesis was as follows: “If Twitter influencers do impact crypto prices; a) the spikes in the number of tweets about a cryptocurrency should correlate with its price; b) the spikes in the number of tweets should precede the changes in price.”

Researchers excluded bitcoin from the study for various reasons. They focused on the 25 most mentioned cryptocurrencies after bitcoin.

In order to find a connection between the tweets of the studied crypto influencers and crypto prices, researchers combined two diagrams — one showing the number of mentions for a coin and one showing its price development, on a daily timeline.

It was concluded that “all the charts show more or less the same thing:”

“The mention curve follows the price curve. When the price fluctuates a lot, influencers tend to write more about the coin.” 

5 steps to the result

To test both parts of this hypothesis, researchers first collected Twitter profiles, according to a preset parameter list.

In the second step, they collected tweets posted from January 2018 to June 2020 (over 1.3 million in English). After excluding posts that contained only emojis, links, or images, 1.1 million tweets remained for analysis.

In the third step, they analyzed the collected texts, with the help of a Python script, and pinpointed what moments demonstrated spikes in the number of tweets about single cryptocurrencies.

In the fourth step, researchers superimposed the graphs of fluctuations in the number of tweets about single cryptocurrencies over the graphs of their price changes. Thus, they indicated that influencers follow the news, not create it. If they tweet more often about a particular coin, it’s because the price has changed, not the other way around.

In the fifth step, a correlation analysis of fluctuations in the number of tweets about cryptocurrencies and fluctuations in their rates showed that the correlation between these two factors is very weak.

Thus, the main hypothesis was completely refuted. BDCenter said:

“Applying to our case, we say, ‘influencers follow the prices, not create them.’ Even though influencers do impact what is counted as news, they do not influence actual crypto asset prices.”

What’s the aftermath?

Now, the big question is what users can do with the knowledge presented and whether it’s possible to predict crypto prices by following Twitter sentiment.

According to BDCenter, it is impossible. However, by analyzing Twitter sentiment, users can forecast where the market will go. Moreover, many price and statistics aggregators ostensibly make such an analysis.

First, traders and hodlers will apparently look at the crypto world more realistically. Second, start-up marketers will likely save their budget by not trying to influence the prices of their tokens through Twitter influencers.

Third, marketers can save their money by choosing the right social media influencers to collaborate with. “As our study shows, it is more efficient to work with influencers who regularly post on coins, have between 50,000 and 100,000 followers, and have an engagement rate of over 500%. Such bloggers will promote crypto projects better than those that only have a large army of followers,” said BDCenter.

The company further warned about the risk of wishful thinking, wherein “crypto project managers may try to flood Twitter influencers with money to improve the price of their tokens. However, such investments are very likely not to return. And if ‘whales’ do this, even they will likely lose their money.”

But there is more…

BeInCrypto also reached out to Olivier Kraaijeveld, a researcher at the University of Edinburgh Business School Management Science and Business Economics, to further elaborate on the topic.

For him, it is imaginable that Twitter influencers can have a short-term effect on prices, simply because their posts will flag a specific cryptocurrency’s name, an idea, news, or price setup. Kraaijeveld said:

“As there is a relatively large group of people on Twitter that is new to the space and less experienced in trading, this group will rely on the expertise/knowledge/opinion of the influencer and copy their trading actions, leading to a stronger collective price action.”

He backed up his thesis with a strong example of Elon Musk tweeting about Dogecoin. The result was a push of the Doge coin price itself. Kraaijeveld explained. “In a similar fashion, Donald Trump’s tweets were for example also known to occasionally affect equity markets,” he said.

Furthermore, Kraaijeveld delved deeper into the definition of a Twitter influencer:

“Hard to define who is an influencer and who is not. Men like Erik Voorhees, Vitalik Buterin, or Andreas Antonopoulos are influential in the crypto space but in my opinion less concerned about prices and are instead focused on functionality and adoption.”

The expert sees a bigger chance of influencing crypto prices through Telegram and Discord channels, where (paid) groups are more focused on posting actual entries as opposed to more general comments on Twitter.  

What are we talking about: price jumps or little pumps?

When we’re talking about the influence on crypto prices, there’s a question whether Twitter influencers could be capable of creating a big price jump or smaller price pumps. Kraaijeveld explained:

“If such an effect exists on Twitter, I am expecting it to be marginal, short-term and it would heavily depend on the account. (Some accounts might have a large follower count but do not disclose specific positions/are not profitable traders or vice versa). It might only lead to some quick pumps but the majority does not have the power to impact pricing.”

Additionally, he sees the impact of Twitter influencers on crypto prices more like a side-effect of sharing thoughts and ideas of the crypto universe itself.

And we have seen some of this action in 2020 when big players like PayPal, MassMutual or MicroStrategy entered the crypto-space. The result was a new all-time high. Regarding the big players in this business, Kraaijeveld said:

“The majority of crypto price action is still dictated by whales and —  increasingly — by institutional parties entering the crypto market. These parties seem to be less present/transparent on social media thereby reducing the effects influencers might have.”


In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.