Rampant bot activity on Twitter helped pump the price of FTX-listed and Alameda Research-traded cryptocurrency, a new study found.
Researchers at the Network Contagion Research Institute also found that bot activity and price action significantly increased after X Corp. CTO Elon Musk shared Tweets about two altcoins.
Bankman-Fried and his executives were acutely aware of the influence that Twitter had on the crypto markets.
NCRI researchers conducted a scaled analysis on Twitter (now known as X) examining over 3 million tweets from Jan. 1, 2019, to Jan. 27, 2023, pertaining to 18 different cryptocurrencies in partnership with New Jersey GovSTEM Scholars.
Separately, a Musk tweet on May 13, 2023, featuring Pepe the Frog memes led to a more than 50% increase in the price of altcoin PEPE within 24 hours.
The NCRI findings raise significant questions about social media driven market manipulation in the broader crypto markets
According to Alex Goldenberg, Lead Intelligence Analyst for NCRI, “Since Musk’s team took over Twitter last year, API changes were made to deter bot creation, possibly reducing crypto promotion and scams.
X Corp. has been increasing the price to access data for researchers, while also filing lawsuits and threats against researchers looking into hate speech and other online harms on its platform.
The NCRI study also highlights how inauthentic activity on Twitter helped drive up the price of tokens listed on FTX in the months before the crypto exchange collapsed.