The rise of influencers in the world of social media has created a new form of marketing. Cryptocurrency influencers have transformed the way information is shared and perceived in the industry. Over the years, they have taken an increasingly important place in the crypto industry, making them the main vehicles for advertising and promoting new projects.
However, dubious projects and obvious scams have also been put forward in aggressive marketing that is known in the industry as " shillings"This essentially consists of massively promoting a project without announcing that one has an interest in this project.
Thus, faced with practices deemed unethical by the community, the question arises about the role and impact that influencers can have on the crypto industry.
From “Bitcoin Evangelist” to Crypto Influencer
In the field of cryptocurrencies, the rise of influencers is relatively recent. There were few people talking about cryptocurrency in 2010 and the content was focused on Bitcoin exclusively because there were no other cryptocurrencies yet, CQDF. Andrea Antonopolous, a professor of economics, was one of the most emblematic figures of the first popularizers of Bitcoin, who were then called "bitcoin evangelists". The latter were not paid to popularize their knowledge to the general public. They were essentially people convinced by the decentralized currency and wanted to share their knowledge - without hoping to make a profit from it. Let us remember that Bitcoin is not a company and that there is no "marketing budget" or even employees to launch a promotional campaign.
The first big wave of crypto influencers appeared in 2017, notably with the rise of fundraising (ICOs) for new tokens, many of which hoped for exponential increases. It was especially at this time that the influence business itself was born. Crypto companies paid individuals to create content and promote the new tokens within their communities.
The rise of the influence business
In the context of the bull run of 2017, the fundraising was spectacular. Many projects turned over millions of dollars in a matter of hours. Two- and three-digit multipliers were widespread. The number of views of crypto content on social networks set records. The new bitcoin millionaires flaunted their success with luxury cars and cryptocurrency was seen as the new Eldorado for getting rich quickly.
Crypto companies began to devote an ever-increasing budget to advertising, aimed both at crypto influencers and specialized media which were also taking off during this same period.
The influence business was taking shape in front of an ever-increasing audience that was ever more hungry for content on the subject. At that time, regulation in most countries was non-existent for both the influencer marketing industry and the cryptocurrency industry.
The first deviations
The first abuses were observed with the creation of content which did not have a warning indicating that it was advertising. In addition, projects without real foundations were presented massively to communities, which had neither the perspective nor the tools to carry out their own analyses.
It was then the ideal combination for the promotion of scams which were widely promoted by hordes of crypto influencers with ever more advanced handling techniques. Since then, bad practices and breaches of trust have only been stronger during the following bull run in 2020. The sums invested in marketing then reached astronomical sums as we can see with the media Kit of one of the biggest crypto influencers of this period (now defunct), who was paid $35,000 for a dedicated video.
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Bad practices of influencers between incompetence and conflicts of interest.
In 2021, the SEC condemned star influencer Kim Kardashian paid more than a million dollars for promoting a token without indicating that she had been paid to do so. However, before this date, it was an extremely common practice in the industry and Kardashian's conviction should serve as an example. --Gary Gensler had said he wanted to emphasize that celebrity endorsement of a project was not enough to make it a product worthy of investment.
There is a type of compensation that is even more problematic than paying influencers to promote a product. There is an inherent element to the influence business if influencers receive tokens for promoting that same token. In traditional finance, this is called " conflict of interest " and this is a strictly forbidden practice. A financial advisor who owns shares in a company could not promote it to his clients, in which case he would be convicted of corruption.
So, in the free world of cryptocurrencies, this is a practice that has been and still is very common today. Very often, influencers who are paid in exchange for tokens in a project lead to pump and dump diagrams“. This essentially involves fueling the desire to buy (FOMO) among a greedy community to sell the asset at a higher price. Once the price has been artificially inflated through abusive statements and shameless promises of gains, the project teams sell their assets. This causes the price to drop drastically and investors are left with worthless assets.
This was the case with the token scandal Save the kids. Several popular YouTubers promoted it heavily through tweets, videos, and stories, insisting that part of the profits would go to a children's charity. Many people invested in the token which fell by more than 60% at launch. The members involved in this project promoted this project before selling their tokens, which caused the price of the token to fall…
It’s a phenomenon that has happened countless times with influencers who are sometimes complicit. Some times, influencers have indicated that they themselves have been victims of this pattern, as appears from the NFT Plush project where celebrities like Kev Adams said they were duped themselves. We can certainly question the good faith of individuals but we can also remember that it is necessary to have a certain knowledge in the field of blockchain to be able to promote a project that calls for it.
Influencers as a lever for growth and as an obstacle to adoption
Many personalities and celebrities from the business world such as Michael Saylor and Elon Musk have been able to participate in making Bitcoin and cryptocurrencies known to as many people as possible. It's a fact and the example of the meteoric rise that dogecoin experienced after tweets from Elon Musk is revealing of the power of influence. However, it is essential to point out here that Musk was not paid to promote dogecoin unlike influencers.
Read the article : Elon Musk: a crypto guru in spite of himself?
To a lesser extent, influencers have an impact on their community and on tokens they have promoted. Thus, it is undeniable that they participated in making cryptocurrency known to as many people as possible. For the most ethical among them and the most qualified among them, knowledge and knowledge are shared and they continue to make the industry more mature. This is the first major advantage that can be attributed to them. In addition, they ultimately provide the liquidity necessary for the proper functioning of the industry.
However, it is important to emphasize that not all influencers are created equal. They do not all have the same skills and the same abilities to analyze a project. Finally, some are more content creators while others have personal enrichment as their sole purpose.
There is a real difficulty for some influencers to make a living from their passion and sometimes, this can push them to work with unscrupulous companies. Other times, influencers who have amassed fortunes through sponsorships and affiliate links no longer seem to know how to stop the flow of income that their influence can generate.
Thus, according to influencers, this is as much beneficial to the industry as it can also be an obstacle to adoption to the extent that its image is tarnished by the scams that abound in the sector.
How to limit the negative impact of influencers in the industry?
It seems that there are several areas on which the entire community can work to clean up the crypto industry before it is definitively cataloged as a casino space.
? Strengthen the training of crypto influencers. They must first learn about investment, economics and finance before creating content. With the impact they can have, it is essential to have influencers who master their subject. Even more, it is also important to control the amounts sought and to know how to limit your own greed to promote the best projects.
? Improve the speaking of the most critical people. A healthy ecosystem is also an ecosystem where all voices are heard. Thus, in France, personalities like Emilien Dutang (Dark_Emi on X) have sometimes made the community aware of certain practices and highlighted the harmful intentions of certain project leaders. In the end, it is the work of a conscientious objector which allows us to clean up the ecosystem. In the USA, we can note the investigative work of CofeeZilla which for example forced Logan Paul to reimburse the victims of its NFT project.
? Reduce the gullibility of communities. There wouldn't be so many crypto influencers if there wasn't an audience to support them. Very often, the members of the communities that follow influencers are young and precisely "influenceable". They don't have the ability to decipher the true motivations of an influencer for example. They can also be naive about the promises of performance that are announced. It is crucial that the community takes a step back from the information given to it and that it works more on its critical thinking. An influencer does not have all the knowledge and it is important that the community is aware of this. Likewise, it is important to realize that it remains a potential "customer" for companies.
? Provide a legal framework to limit abuses and false advertising. In the same way that traditional finance protects consumers, it is important that the crypto industry has a regulatory framework to prevent certain abuses. Recently, a law to limit fraudulent product placements was approved although many people still consider it too lax when it comes to crypto influencers.
Final Thoughts
It's time to wrap things up, right? The question of the impact of influencers is delicate to the extent that there are as many beneficial effects as disadvantages on the crypto industry. However, it appears that this essentially depends on the quality of the influencers, who must then find a balance between the expected remuneration and the quality of the work to be provided. We have also seen that the community that follows influencers also has a duty to exercise critical thinking when it comes to investing. She must learn to decipher the real motivation behind the promotion of a product.
It is essential to be realistic that most influencers are not financial experts and many do not have the tools to understand the projects they promote. Many of them have more marketing skills than finance. This means that they do not have the necessary knowledge to judge and even understand the issues and underlying aspects of a project. This can become even more dangerous when they are paid to advertise to their audiences.
To conclude, we will say that it is once again essential to work on your critical thinking and your knowledge, the only real weapons for navigating the sometimes brutal world of cryptocurrencies...
