14 May

Crypto & Celebrities: Why Do Tweets Matter?

Startup, Entrepreneur, Crypto, Bitcoin, Elon Musk

At this point, you’ve probably heard about Dogecoin ($DOGE). 

The meme-based bitcoin rival has surged in value over the course of 2021. As of 2 May 2021, a 1 January investment in the coin would have seen a 7,760% return. 

A lot of interest in the coin has been attributed to celebrity endorsements. Indeed, Forbes observes the price of $DOGE can be reliably tracked to Elon Musk’s tweets.

But Musk is not the only celebrity promoting cryptocurrencies. And $DOGE is hardly the strangest meme coin around.

Following close on the heels of $DOGE’s historic rise are a huge range of copycat “shitcoins”. Highly volatile “joke” cryptocurrencies with all-time total volume peaking in the millions, shitcoins are perhaps the strangest investment craze of 2021 (you can read more here). 

While the likes of Mark Cuban, Snoop Dog (rebranded “Snoop Doge”) and Guy Fieri are pumping $DOGE, other celebrities are still promoting risker ventures. 

It makes for strange reading. 

Startup, Entrepreneur, Soulja Boy, Snoop Dog, Twitter

Rapper Soulja Boy, via Twitter.

What has happened to Soulja Boy’s Twitter feed?

For the uninitiated, each of these one-word tweets refers to a different cryptocurrency. You probably recognise Bitcoin, and $DOGE too. The others – “Safemoon”, “Elongate”, “Ziliqa”, “Datamine” – all of which are shitcoins. 

Take Elongate as an example: the coin’s name references an Elon Musk Tweet about Watergate

At launch, Elongate had a 24-hour trading volume of $5 million. Two weeks later the 24-hour trading volume had risen to nearly $18 million. Two weeks after that peak, the coin was all but dead.

This wasn’t even a particularly significant shitcoin. 

Safemoon, the largest of the shitcoins on Soulja Boys’ list, had an all-time trading volume of nearly $140 million, with a similarly volatile history.

We should stress that these tweets weren’t a one-off incident.

Throughout April, Soulja Boy took breaks from recording his new hit single to promote various crypto schemes. He even posted QR codes to coin exchanges. At one point he floated the idea of launching his own shitcoin.

Why are people investing in “Shit Coins”?   

In general, these shitcoins are purely speculative investments. Their names are jokes, their code copied from other established cryptocurrencies, and few believe they have any real value. 

The aim is to invest early, hope the coin “moons” (spikes in value) and then sell before an inevitable crash. 

There are many reasons to send a tweet, but what Soulja Boy and other celebrities are doing with their platforms looks a lot like “shilling”. In the crypto world, shilling is the process of generating hype so that your own investment will increase in value. 

This happens at a much smaller scale on all of the major community pages. Take for example this post on the r/CryptoMoonShots subreddit.

Where is this going? 

The heart of this story isn’t Soulja Boy or any of the celebrities that are piling into crypto. The real story is what is happening to their fans and followers.

Low-cap cryptocurrencies can deliver amazing returns, but they can also sink your entire investment in minutes. 

When Soulja Boy tweets QR codes to risky shitcoins, or when Mark Cuban tells Ellen that $DOGE is a lot better than a lottery ticket, their message is reaching a huge audience. 

At some point, it might be worth reflecting on the responsibilities that come with that kind of reach.

Header Image: Mark Cuban via Gage Skidmore (Flickr).

 

Celebrities
Cryptocurrency
Dogecoin
Elon Musk
Shitcoins