Twitter bots helped pump the price of crypto, including FTX altcoins traded by insiders, says new research.
Conducted by NCRI (Network Contagion Research Institute) recently concluded the research. The scaled analysis took place on Twitter (now X), including the examination of 3 million+ tweets between 2019 and 2023.
The research even found astute connections between several crypto with X Corp. and Elon Musk tweets. New Jersey GovSTEM Scholars collaborated with NCRI to conduct the research. It was found that several altcoins mentioned by SpaceX and Tesla CEO Elon Musk boosted a price hike of more than 50% in one day alone.
For example, the study showed how Musk’s retweet of a post with a kitten about a coin from a Twitter influencer boosted the altcoin. CoinMarketCap noticed a surge of more than 2x surrounding the altcoin on June 25, 2023.
Similarly, on May 13, 2023, Musk tweeted about Pepe the Frog. This led to a 50%+ hike in the price of PEPE altcoin. The tweets promoted genuine discourse and promotional and bot tweets surrounding the altcoin.
That is not all, as the biggest question mark was raised about inauthentic Twitter activity boosting FTX-listed tokens’ price. According to Goldenberg, numerous bot-like accounts manipulated market sentiment to drive the price of FTX-listed coins months before its collapse.
The collapse in reference took place in 2022 when the renowned exchange wound up bankrupt almost overnight. FTX reported going through a rough liquidity crunch, leading to many crypto firms distancing themselves from the exchange.
Coming back to the study, NCRI researchers found that 6 small-cap FTX-listed tokens were massively influenced by dishonest social media activity over Twitter. According to the report, inauthentic chatter about the FTX coins was deliberately and successfully placed.
These tokens included SPELL, RNDR, GALA, BOBA, and IMX. It was also found that Alameda held at least 5 of the tokens before being listed on FTX.
The report also suggested that Sam Bankman-Fried, the FTX Founder, and the team were aware of Twitter’s influence over the crypto market. However, Bankman-Fried has declined to share any official comment on the situation.