Are Crypto-Spouting Twitter Bots Artificially Inflating Altcoin Prices?

Adekunle Joshua

Crypto-spouting Twitter bots may be artificially inflating altcoin prices, a new study suggests

The Network Contagion Research Institute (NCRI) analyzed over 3 million tweets surrounding 18 altcoins from Jan 1, 2019, to Jan 27, 2023

Twitter bot activity played a significant role in amplifying the value of cryptocurrencies like The Sandbox (SAND) and Gala (GALA), among others

Inauthentic tweets increased after FTX posted about the tokens, raising questions about coordinated bot activity involving FTX and Alameda Research

Half of the FTX listed coins showed signs of price influence due to inauthentic tweet volume, suggesting deliberate efforts to influence FTX coin prices

The study also found Elon Musk's tweets impact memecoins Pepe (PEPE) and PSYOP, with bot accounts surging before Pepe's launch and Musk's tweets boosting both tokens

The researchers warned that similar bot activity could affect stocks and other securities, citing the 2022 social media frenzy around "meme stocks" like Gamestop and AMC

Lawmakers Elizabeth Warren and Bernie Sanders urge the IRS and Treasury to close tax loopholes exploited by "crypto tax evaders," pointing to a $50 billion crypto tax gap