Twitter has recently partnered with eToro to make it easier for social media users to trade cryptocurrencies. According to crypto expert Dominic Basulto, cryptos with strong social media followings, especially Bitcoin, could see the biggest impact. The downside is that Twitter could make it easier for speculative meme coins and other low-quality cryptocurrencies to gain momentum on social media.
Twitter’s partnership with eToroto the oins can benefit
On April 13, Twitter announced a new partnership with online trading platform eToro that will enable stock and crypto trading on social media. When Twitter users see others tweeting about a particular cryptocurrency, they can actually just press a button and they are transferred to the eToro platform to take a action for that crypto.
This move has the potential to shake up the stock and coin trading world. By some estimates, 4.7 million searches are made on Twitter every day for companies and cryptos using the social media platform’s “cashtag” feature. Even if crypto only accounts for 20% of these searches, that still amounts to 1 million searches per day. This, in turn, can significantly increase crypto trading volume. So which cryptos will benefit the most?
1. Cryptocurrencies, the darling of social media
The biggest impact will likely be seen in cryptos like Bitcoin (BTC) and Dogecoin (DOGE) that are talked about a lot on social media. The first is currently the world’s most popular crypto by market cap, and it’s nearly impossible to spend any significant time on Twitter without seeing it mentioned in your social media feed. Bitcoin currently accounts for 46% of the total crypto market cap, and this ratio is likely to increase after the Twitter deal.
Dogecoin has also become a social media favorite and a personal favorite of Elon Musk. It’s easy to see how Dogecoin could become the poster child for what’s possible with the Twitter-eToro partnership. Just this year, Musk took a series of steps to promote Dogecoin on Twitter. Even, cryptocoin.comHe even went so far as to temporarily replace the iconic bird logo for Dogecoin’s Shiba Inu dog mascot.
2. Cryptos with loyal fan and developer communities
The next major coin category that could benefit from this Twitter deal includes coins with loyal fan and developer communities. XRP (XRP), formerly known as Ripple, is an example. Currently, XRP is in a legal battle with the Securities and Exchange Commission (SEC) and Twitter has become the go-to place to learn about the latest in the case. XRP followers even have a name (“XRP Army”) and can have enormous online influence in shaping the narrative around crypto. You can see hashtags like #Ripple and #XRP trending on Twitter on any given day.
But there are other less speculative coins that have loyal developer communities. For example, top Layer-1 Blockchain networks like Ethereum (ETH), Solana (SOL), and Cardano (ADA) all have large communities and fan bases around the world. These, too, are ready to take advantage of the Twitter deal. The more fans and developers tweet about them online, the more likely they are to be traded by other Twitter users.
3. Momentum coins and meme coins
The problem, however, is that social media influencers and online scammers can use Twitter as a playground, basically raising the price of coins and tokens that may have little value. Crypto is still like the Wild West in that respect! While the SEC has taken some steps to stop coin pumping and dumping operations, they still exist. Typical scams involve a crypto with incredible momentum, a very low price, and virtually unlimited upside potential.
Other things to watch out for include tokens that are very similar to popular coins but are actually worthless. Social media phenomenon Kim Kardashian got into trouble with the SEC because of this, and a settlement of $1.26 million was reached in October. Kardashian thought she was promoting Ethereum (currently trading at around $2,090), but was actually promoting something called EthereumMax (currently trading at $0.0000000001979).
What should investors do?
My main concern is that the Twitter deal will change the way people invest in digital currency. Crypto investments, which are already largely focused on short-term profits, can focus even more on the short-term.
Instead of focusing on coins with a solid long-term value, investors will focus on coins that show instant price movements. After all, it’s fun to show your social media followers a trading chart if a crypto is skyrocketing to the moon. Additionally, people may want to buy coins just because they’re trending on Twitter or because Elon Musk is tweeting about them.
At the end of the day, I think the Twitter deal will be good for crypto. Because it will mostly make trading more mainstream and help bring crypto to the masses. As long as you have a long-term mindset and stick to strong fundamentals, checking in on Twitter from time to time can be another way to make you a better crypto investor.
The opinions and recommendations in the article belong to the experts and are definitely not investment advice.
