Crypto Influencers Reportedly Gain $105,000 per Tweet
There is no doubt that social media has acute control over its users and it’s used to educate and motivate people into buying digital currencies.
An engineer, Paul Angus, is a YouTube star with over 8,000 subscribers and has been talking about virtual currencies for a long time now. He is another example of numerous social media celebs that have been paid by companies for promoting their currency or Initial Coin Offering ICO.
The most reputed name that comes along is of John McAfee, the famous anti-virus creator, who informed that he took $105,000 per tweet. The role of crypto influencers has become more important after major internet platforms like Google, Twitter and Facebook banned any crypto related advertisement this year.
Market experts believe that the emergence of bounty campaigns is the biggest reason for ICOs to raise huge sums of capital in record times. Thus, ad ban and impending regulations have also not been able to terminate the occurrence of new currencies. Campaign advocates justify their activities as an inexpensive way to build a brand’s goodwill while critics consider it nothing more than hyphening the crypto bubble. Meanwhile, places where ICOs are considered as securities bounty hunters essentially become unregistered broker-dealers.
Global director of fintech strategy at Autonomous Research in London, Lex Sokolin, said, “Once it becomes clear that financial outcomes can be manipulated not just by trading but [also by] creating perceptions through social media, regulators will take a very hard stance.”
Earlier in 2016, John said that he has quit promoting ICO or any crypto firm after receiving warnings from the Securities and Exchange Commission. SEC has advised every celebrity endorsing any offering to check the authenticity of the firm before taking any decision as they dupe investors.
Jay Clayton, SEC Chairman, said that coin offerings are evading security formalities and most of them are probably a fraud. Another regulator named the Commodity Futures Trading Commission has requested users to avoid investments in any token that is being advised over social media.
According to CoinSchedule, such events have raised over $11.6 billion for blockchain-based start-ups within the first half of the year. Solume, which investigates crypto-related social media posts, revealed that 18 percent of posts on Twitter, Reddit and bitcointalk.org are bounty campaigns. One should know that data collected in January showed only 6 percent of paid users.
It is evident that crypto firms are using social media platforms to market their products with the help of celebs that can influence possible investors. Facebook is lifting its ban over crypto advertisements which will boost the sphere more than ever. However, a firm is prohibited from directly advertising an ICO. Thus the reversal on comes with its own limitations and cannot be used by any unauthorized firm to market its products.
As of now, it seems like an excellent time in making for digital currencies even though it is still underperforming. Again, it is very hard to ignore advice from a so-called crypto expert. Therefore, people need to be as cautious as possible.