Crypto influencers and corporations are giving their POVs on the FinTok phenomenon and its impact on retail investments.
Where do people find out about cryptocurrencies? The knee-jerk answer to this question may tell more about who you’re asking than the dynamic reality of social media.
If you’ve been a cryptocurrency supporter since Bitcoin’s debut, you can still check out mailing lists where Bitcoin’s whitepaper was originally featured. Depending on how and when you got into the crypto world, you can rightly point out the influence of Telegram, Reddit, YouTube, Instagram or Twitter (where reporters congregate). However, a recent report by CryptoHead named a new top crypto influencer. The report determines influence by adding the total audience of everyone from the top 100 influencer lists – and the new biggest influencer is BitBoy, who is ranked ahead of Justin Sun and Vitalik Buterin in terms of total reach. (Note: Ratings are for crypto influencers only – so Elon Musk is not included.)
Image source: CryptoHead, data current as of May 2021.
If you look at the numbers, it’s pretty clear what the secret to Armstrong’s success is – his TikTok reach in May 2021 is higher than Justin Sun’s mighty Twitter reach. Among the top 5 on the list, BitBoy is the only one who has really used the power of TikTok to reach new audiences.
We asked Ben Armstrong, Bitboy Founder and Host, for an answer on his new status and he replied:
“It’s a humble honor to be the number 1 influencer in the crypto space. But this is really not about me; it’s about my community, the BitSquad. We have built a beginner-friendly and accepting community that serves as a grassroots movement and initiates the global adoption of cryptocurrencies, ”said Armstrong.
It is worth noting that the numbers given in the table are already out of date – Bitboy’s audience is growing rapidly. The channel now has 410,000 Twitter followers, 222,000 on Instagram, and has just passed the 1 million subscriber mark on YouTube.
Is TikTok’s influence a positive thing?
It’s easy to underestimate TikTok – Facebook has a massive 2.74 billion users, YouTube has over 2.2 billion, and Instagram has 1.2 billion users, according to a recent report from DreamGrow. These numbers make the 689 million active users of TikTok seem comparatively modest. However, TikTok attaches great importance to engagement. The content is short, very visual, easy to search and especially interesting for Gen Z and Millennials.
Since 2020, TikTok has shown its strength in creating coordinated actions between users – it has brought us thousands of young people dancing to Cardi B and making shanty songs relevant with ShantyTok. Check out The Wellerman if you missed this.
Even more revealing is the way KPop fans have used TikTok to coordinate user actions on twitter and effectively block alt-right hashtags on twitter, what they did during the 2020 legislature. Anyone familiar with marketing can tell you how difficult it is to get someone to leave one platform to trade on another platform. TikTok users have strong parasocial relationships with the creators on the platform. They take questionable cooking tips and slightly less dubious self-help information and lots of dancing, singing, music and silliness.
They also form de facto Robinhood investment groups to drive the price of Gamestop up along with Reddit. Now FinTokers are ready to bring the sweet and lovable Dogecoin “to the moon”.
TikTok stands for enthusiasm and a growing user base that creates motivated communities. It doesn’t have to be as big as Facebook or Twitter. Five minutes of “Doom scrolling” on Twitter or Facebook will show how fragmented and often contentious these target groups can be. TikTok moves many motivated, mostly young people with coordinated grace.
TikTok’s crypto contingent has been called “FinTok” and is a force to be reckoned with – but is it a force helping new crypto retail investors?
Rachel Siegel, known as CryptoFinally on Twitter, YouTube and Instagram are not yet convinced of the quality of the information found on FinTok.
“There’s a lot of information on the internet, the danger with TikTok is you’re only listening to influencers and people who have made a shipload of money. The best thing you can do is broaden your perspective and take a bigger look at what you are investing in. There are tons of projects that you won’t all hear on TikTok, ”said Siegel.
To be clear, Siegel’s objections to TikTok are less a condemnation of the creators there (let alone creators like BitBoy, who first launched on other platforms) and more a reminder to new private investors to do their own research and not just put their full trust a couple of creators who make short format videos.
“Yes, there are moon missions to jump on, yes, there will be influencers who have made an incredible amount of money, but it can be dangerous for the average retail investor. Misunderstanding the market you are investing in can be costly. The most important thing I recommend to all new investors is to do their own research and make their own decisions, ”said Siegel.
Siegel added that because of data security concerns, she chose to avoid TikTok as a platform.
Crypto influencer Scott Melker, known as “The wolf of all streets“Is similarly skeptical of TikTok’s impact on new investor behavior.
“Millennial and Gen-Z traders are notorious for their interest in meme stocks and coins, having pumped overvalued assets like GameStop and DOGE to the moon. Wall Street is fighting the power of retailers willing to buy jokes and keep up Diamond hands come hell or high water. This behavior is mainly encouraged on social media, with TikTok being the focus of the buzz, ”said Melker.
Exchanges like Bitbuy, based in Canada, have adopted TikTok to reach new crypto investors with educational content.
“Our content on TikTok focuses on Crypto 101 and exciting developments in the crypto industry. We use the short video format alongside trending content and viral sounds in the app, ”said Jordan Anderson, COO of Bitbuy. “The younger population is more aware and more susceptible to content that will help them build wealth earlier in their lives. There is a shift for crypto exchanges to focus not only on the seasoned trader segment but also on the younger user base. “
Anderson believes TikTok is making a positive impact, spawning a new generation of retail investors who are more serious about building their holdings when they are younger.
“Millennials and Gen Z are quick learners and have in-depth access to technology and will therefore invest or trade in crypto at an earlier stage in their lives, and it will become a pillar in their lives and for future generations,” said Anderson.
Deacon Hayes, founder of Well Kept Wallet, also uses TikTok to reach a younger investor audience. He believes TikTok is changing user behavior for the better.
“Retail investor behavior is changing based on what people watch on TikTok … Teenagers invest in cryptocurrencies just because they saw a TikTok video showing how they could potentially get rich … They invest in NFTs and Crypto because they are new and have the potential for exponential returns. The challenge is that there is high risk and not all cryptocurrencies are created equal, ”said Hayes. “It is important that people realize that this is not a good sole long-term investment strategy … Do your research and make sure you are investing your money wisely and not playing with your future.”
Justin Kline, co-founder of Markerly, an influencer marketing agency, is uncompromisingly optimistic about the hype machine TikTok.
“It’s VERY hype driven. Everyone wants to push for the nearest pump and dump and social media is becoming the primary forum for such discussions. TikTok is absolutely helping to drive the hype. It is made up of a younger population who are more likely to base their investment decisions on their emotions, ”said Kline
Kline pointed out that “bubbles” are not exclusive to crypto – and that perhaps the USD’s fiat bubble should be watched.
“Right now the Federal Reserve is printing an unprecedented amount of money that is already starting to drive inflation. That is why Bitcoin entered the stage this year – it has a fixed amount. It’s also interesting that a lot of people are talking about crypto being a bubble, but none of them consider that maybe the real bubble is fiat currency – a bubble that could burst before our eyes, “Kline said.
Whether you like the style of the content or not, TikTok is here to stay. Since its launch in 2016, it has grown exponentially in users and downloads, and has become one of the most popular apps on the Apple Store. It’s true that audiences are mostly younger – according to Statista, in 2020 more than 62% of TikTok users in the US were between 10 and 29 years old and only 7% were over 50 years old. This was a conscious decision by the YouTubers, who appeal to a younger target group with the energetic, short-format, video-controlled platform.
The TikTok audience is clearly becoming a massive buying block. For influencers, investors, and blockchain companies, ignoring this audience seems to be a greater risk than engaging with them. The platform shows no signs of slowing down – even when the 45th US president tried to ban it.
Perhaps traditional and institutional investors would be well served to open an account and see what these kids are saying. Even if you’re not inclined to join the frenzy, it seems wise to keep an eye on what they are doing so that the next Dogecoin that hits top speed doesn’t completely surprise you on the way to the moon.
Cover modified picture by iXimus of Pixabay
Article originally appeared in Benzinga.