Crypto has an influencer problem

In the crypto community, a prevailing myth has taken root — that success hinges on influencers, where buzz and follower-counts overshadow substance. 

Tens of thousands of crypto projects claim they are striving for decentralization, yet they fiercely compete for the attention of influencers on centralized platforms. To me, this is the very definition of absurdity.

I’d like to challenge this influencer convention in crypto. Relying on influencers does more than just fall short of promoting true decentralization; it actively fosters a landscape where passive wealth accumulation is glorified and critical investment acumen is outsourced to those who may boast followers but lack financial wisdom.

This shift in focus is not merely a critique but a clarion call — urging the crypto community to wake up to the realities of a system that, under the guise of innovation, hinders the revolutionary potential of cryptocurrency.

The crypto community’s reliance on influencers has shaped the landscape of the crypto space significantly. This influence, while potent, often undermines crypto’s foundational principles by promoting a narrative of easy wealth and reliance on advice from non-experts.

Influencers build trust and credibility with their audiences by only showing winning trades: This creates the illusion that the influencer is an expert trader with an impressive track record. 

Many crypto influencers are also paid by projects to pump their low liquidity altcoins: They encourage their followers to invest, then dump the coins after the price spikes, profiting at the expense of their followers. The influencer appears correct in their recommendation, further solidifying trust, allowing the pump and dump cycle to continue with new coins. Followers buying late in the pump are often left holding worthless bags when the crypto eventually crashes. 

By hiding paid promotions and early investment, influencers trick their audiences into buying while they dump their holdings.

A study highlighted by the Oxford Law Blog notes that, on average, following the advice of crypto influencers results in negative investment outcomes, with a worse financial outcome the more “expert” the advisor claims to be. This aligns with concerns raised by the Securities and Exchange Commission, which has warned advisers about the need for increased diligence when making crypto recommendations and emphasizing the importance of ensuring such advice aligns with clients’ best interests​​.

Social media’s influence on crypto prices has been well-documented. Tweets from prominent figures like Elon Musk have had a direct impact on the market, with significant price shifts following notable tweets. This phenomenon underscores the market’s sensitivity to social media buzz and the potential for manipulation through these platforms​​.

Read more from our opinion section: Web3 keeps falling short of real decentralization

Some may call out social media platforms like X, YouTube, TikTok, Reddit and Facebook to better police misleading influencer content. However, strict moderation is unlikely as these influencers drive user engagement — which translates into profits for these platform’s owners. Influencers and social platforms operate in a symbiotic relationship where influencers draw in massive audiences, while platforms profit off the inflated traffic, ad revenue and data collection. With profits tied to the success of influencers, platforms seem to turn a blind eye. 

The only way to weaken this deceitful system is to starve it — users must become savvier and simply tune out influencers altogether. An informed, skeptical audience that provides no traffic, no clicks and no ad revenue hits them where it hurts. 

The trend of following influencer advice without adequate due diligence undermines the credibility and development of the crypto community. The importance of research and caution in crypto investment cannot be overstated.

Have we sacrificed our ideals for greed and vanity metrics? The promises of crypto must amount to more than individual wealth accrued through cunning tricks. True decentralization holds the hope of societal change — of shifting oppressive structures, expanding financial access and revolutionizing how humanity organizes and governs itself.

Read more from our opinion section: If we want crypto to succeed, we’ve got to give X the boot

As a community, we must grow up and take responsibility. No longer can we simply glorify passive wealth while compromising our principles. The time has come to build an ethical, transparent crypto ecosystem that realizes the vision that launched this revolution.

We must have the courage to create technologies, spaces and dialogues that reflect the more just world we wish to inhabit. Projects should embrace openness and community-centric development, ensuring they empower their users rather than centralized actors.

Investors must adopt critical thinking, comprehensive research and robust diligence — not impulse and hype — as the basis of decision making. And as participants, we should demand accountability and wisdom from leaders, not just viral tweets.

Our decentralized future requires both technological and cultural maturation. By building systems and spaces for ethical participation, the crypto community can fulfill the promise of a revolution that unites us in working towards the greater good. 

This is a call for us to grow up and take responsibility — the promises of crypto are too important to leave to chance.

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