TikTok Influencers Abound, Crypto Traders Beware
TikTok has no shortage of cryptocurrency and investing content, but the China-based app is looking to crackdown on sponsored posts.
- There’s a new group of influencers and they want to make you money
- Financial influencers, mostly self-taught, share trading tips and advice, and some are cashing in
New investors thinking about delving into the digital asset space want to know where to put their money. Enter the influencer.
Social media video platform TikTok has no shortage of cryptocurrency and investing content. A quick search for ‘crypto’ on the TikTok app reveals tens of thousands of videos, most of which are captioned with some variation of “what I’m trading now,” or “5 things to know about the crypto market today.”
The videos are short, catchy and, most importantly, easy to follow. The creators address their followers casually, as if they are talking to friends over cocktails.
“Hey guys,” TikTok creator Morgan Marshall greeted followers in a recent video, which she filmed from the front seat of her car. “If you’re just starting out trading and you don’t know what you’re doing, this is probably a good video to watch.”
Desperate to learn; happy to help
Patrick Kim, a crypto education TikTok creator who started trading in 2017, launched his TikTok account in April. He gives tips on how to get started in the space and what to watch. He now has almost 95,000 followers.
“The majority of viewers ask questions about where to buy, how to buy, what coins to buy,” said Kim. “Very few are asking about the tech side of it. Most people are just trying to hit the jackpot and just kind of get rich quick after seeing the spike in price and returns.”
Callum Carver, a United Kingdom-based TikTok creator with nearly 200,000 followers, said that people are desperate to learn, and he is happy to help.
“I like to teach people the very basics of how to get into it from nothing, because that’s what I did, essentially,” he said. “I was quite lucky because I was able to learn from my dad, so I want to almost be that person for others. People can look at a video and see a tutorial of me setting up an account, learning how to invest and what this means.”
Carver and Kim, both self-taught cryptocurrency investors, are part of a new and growing group of financial and crypto influencers, the majority of whom release video content on YouTube and TikTok.
However, TikTok recently announced a ban on sponsored content promoting financial services and cryptocurrency investments, as reported by the Financial Times. The app will crack down on paid content that pushes viewers to invest in certain products or coins. It’s a move that has been a long time coming, Kim and Carver said.
“It’s really not surprising at all,” said Kim. “I was getting messages daily asking me to promote all these sh-tcoins that are worthless. I do know there’s certain influencers that definitely took advantage and took the money and recommended these coins to a lot of their followers, it just wasn’t my style.”
One “sh-tcoin” that appears frequently on the app is the Australian Safe Shepard coin, known as ASS coin.
A recent TikTok video made by user Alex Goa promoting the coin shows a man showing off the money he made on the coin to his presumed girlfriend. The video is captioned with the hashtags “ASScoinchallenge” and “TikTokinvestor”.
It is unclear whether the video, which has more than 344,000 views, was a paid post but it’s message is clear: Make money with ASS coin.
Educate but not advise
Carver, who is compensated through the TikTok creator fund, which pays creators based on views and followers, is careful about how he addresses his followers.
“I always make sure that people know that is just my opinion,” said Carver. “All it takes is one person to post a video talking about the money they’ve made with this one coin, and people listen, because for some reason, on TikTok, as soon as someone sees an idea that could possibly be money-making, they will go all-in on it.”
It’s important to educate but not advise, Kim agreed, or else face follower backlash.
“I personally don’t like recommending specific coins, even when the market is going up,” said Kim. “It’s most likely going to be a lose/lose situation for me if I do that, because even if the coin goes up, there’s probably other coins that go up even more.”
74% of cryptocurrency investors are between 25 and 44-years-old, according to an April survey from crypto exchange Gemini. 80% of TikTokers are younger than 34 and roughly a quarter of users fall between the ages of 25 and 44, according to data released at the beginning of the year.
“There’s surprisingly a good amount of people who are older than I expected to be on TikTok, middle aged, maybe low 40s,” said Kim. “But that’s just based on the profile picture, I guess that might not be them. But there is a good amount of people commenting that seem to be out of their 20s.”
No shortage of options
Newer crypto investors have no shortage of options when it comes to educational content though. Patrick Hubbard, a trader, bought his first digital assets in April after his neighbors started asking him about the crypto market.
“It’s always been a hobby, investing, and so I’ve always read and studied up on the stock market and whatnot,” said Hubbard. “ I had friends that started asking me about crypto with all of the hype around dogecoin and all of that running up between January and April right, and I didn’t really know much about it.”
Hubbard became a Voyager exchange user after reading up on bitcoin and watching a few YouTube videos. He also found a few helpful podcasts and hopes to read The Bitcoin Standard by Saifedean Ammous soon.
Thanks to his education, Hubbard knows what to look for in investment advice. Not all crypto investors are as diligent, though. US regulators and now TikTok are stepping up to protect newer traders.
As the industry progresses, they won’t be alone. Senator Elizabeth Warren has given the Securities and Exchange Commission a deadline of July 28 to issue cryptocurrency policy that protects investors.