Crypto Influencers – Past and Present

Next to COVID-19, climate change, and semiconductor chip shortage, one thing has been dominating headlines for the last two years – cryptocurrencies. The most popular and most valuable of them all – Bitcoin – seems to be dictating the pace for other cryptos, with most of their jumps or drops in price echoing Bitcoin's oscillations in value.

However, besides "traditional" economic markers, such as supply and demand, that determine the price of crypto, a new factor that can significantly affect their value has recently come into play. Crypto influencers are public figures who – purposefully or not – can almost single-handedly cause cryptocurrencies to change value overnight. 

While this might seem like a brand-new occurrence, cryptocurrencies, especially Bitcoin, have been closely tied to influential individuals from their very conception. Let's take a trip down memory lane and see how we reached a point where eccentric billionaires, media personalities, and esports pros can all make or break a cryptocurrency. 

How It All Began – Satoshi Nakamoto

The person (or people) behind the name of Satoshi Nakamoto, Bitcoin's founder, is still shrouded in mystery. Over the years, many people claimed to be Satoshi, hoping to bank on the tremendous influence this could bring. However, because Satoshi's Bitcoin wallet addresses are known, anyone wishing to prove they are Nakamoto would just have to move some BTC from one to another. So far, all pretenders have failed to do so.

Satoshi mostly worked on Bitcoin in the 2007-2010 period. He generally steered clear of any interventions to the Bitcoin market. Additionally, wallets identified as his via the Patoshi Pattern never sold the Bitcoin stored there, including those mined in the genesis block. While the exact reasoning behind this hands-off approach is not known, many people presume it's because he doesn't want to exert too much influence on the Bitcoin market, which is already infamous for its volatility. 

While Satoshi can't be considered an influencer in the traditional sense, his name carries weight, as proved by the numerous people claiming to be him.

John McAfee and the First Crypto Pump-and-Dump Scheme

John McAfee was a highly controversial millionaire who developed the popular antivirus software still bearing his name. After building up his influence by writing the code for neutralizing the Pakistani Brain Virus and launching the McAfee antivirus, he mostly used his publicity to boost businesses or sectors he had a financial stake in. He also dabbled in politics, trying to win a Libertarian Party nomination for the presidential elections in the US. In October 2020, he was arrested in Spain on tax charges filed in the US. Besides tax evasion, McAfee was also charged with running a cryptocurrency "pump-and-dump" scheme.

Together with his bodyguard Jimmy Gale Watson Jr, McAfee used his vast social media following to promote cryptocurrencies like Dogecoin and Reddcoin. Then, as people flocked to buy these cryptos and their price soared, the pair sold off their own cryptocurrency supplies, pocketing $2 million. McAfee mainly used his Twitter account with 1 million followers to promote these coins while not disclosing he had a stake in them.

However, just after Spain's National Court approved McAfee's extradition to the US, he was found hanged in his prison cell in Barcelona. Apparently, he had committed suicide. What added a layer of mystery to the whole case was that McAfee himself tweeted a few years back that he would never take his own life and that if that were to occur allegedly, it would be certain his enemies in the US had him murdered. Whatever is the case, McAfee was one of the first public figures to wield his influence to affect cryptocurrency prices – and profit from doing so. 

Elon Musk, "The Dogefather"

Elon Musk, the man behind Tesla and SpaceX, is without a doubt the most significant crypto influencer in the world right now. The often unpredictable billionaire stands behind some of humanity's most ambitious projects like colonizing Mars, satellite Internet, human brain and AI integration, and so forth. In fact, these projects are often so ambitious that they're deemed unrealistic by the scientific community. 

Musk boasts an enormous Twitter following of 57.8 million. Hence, it's no surprise that his tweets carry substantial weight, especially considering he is a media darling often portrayed as a real-life Tony Stark. 

His relationship with cryptocurrencies has been tumultuous, to say the least. At first, he was a big proponent of Bitcoin, significantly increasing its value by publicly promoting it. Bitcoin's price rose even more when Musk's company Tesla decided to buy $1.5 million in the cryptocurrency. However, he later sent Bitcoin plummeting when he voiced his concerns about the ecological impact of crypto mining.

Musk then switched to promoting Dogecoin and other similar altcoins, often referred to as "meme coins." Unfortunately for crypto investors, Musk's tweets were often erratic, one day promoting a coin and shooting it down tomorrow. This sent prices on a rollercoaster, frequently wiping out billions in market cap, along with the life savings of many a retail investor following Musk's advice. If at first, Musk was unaware of the power he held over crypto prices, he certainly is now, and he is purposefully using his social media reach to play with the market.

While Musk definitely still holds huge sway over the public and the crypto market, many of his former fans seem to have turned against him. He was accused of intentionally manipulating the market, and it appears that his tweets have lost some of their power. It's possible that the Securities and Exchange Commission might even charge Musk for his tweets, as he was previously fined $40 million for similar transgressions. 

Even though Musk's tweets might not be as powerful, he remains the apex crypto influencer – something we don't see changing soon.

Influencers and Altcoins

If crypto influencers were few and far between some years back, nowadays, it seems you can't go online without stumbling into one. Celebrities like Kim Kardashian, members of the professional Call of Duty team FaZe, and Tana Mongeau are all promoting one coin or another. However, what's specific about them is that they're not promoting any of the most popular ones like Bitcoin, Ether, or Doge. Instead, they often push less-known altcoins. 

A progressively larger portion of the public no longer interprets these promotions as a sign of the influencer's actual belief in cryptocurrencies. Instead, they all seem suspiciously like pump-and-dump schemes.

FaZe team members were accused of just that, promoting previously unknown cryptos such as BankSocial to their huge fan base. After a month, they stopped mentioning BankSocial altogether and deleted all previous mentions of it from their social media accounts. The available evidence suggests that FaZe members profited from this promotion by selling their supplies when prices peaked as a result of them praising the crypto.

These promotions seem to stem from the altcoin creators, who pay social media influencers hefty sums to promote their crypto.

Should I Follow Crypto Influencer Advice? 

Cryptocurrencies are infamously volatile, rendering any kind of investment extremely risky. It looks like crypto influencers are here to stay, but should you follow their advice? We'd advise against it since empirical data shows most of them are not acting in good faith when promoting altcoins.

Of course, it's possible that an influencer truly believes in one specific cryptocurrency, but if you are dead set on following someone's advice, it would be best to stick to the more popular coins.