Cambridge Professor Calls Out Crypto Influencers' Use of TikTok-Style Cult Communities for Profit

2024-06-26 02:33:51

Shalini Nagarajan

Last updated:

June 26, 2024 06:33 EDT | 1 min read

Crypto influencers use platforms like TikTok to appeal to people’s desire for social belonging by forming inclusive communities that resemble cults, according to a Cambridge professor.

Research referenced in Professor Alan Jagolinzer’s study suggests that TikTok and other social media platforms leverage social-psychological factors that attract audiences, including crypto investors, to influencers.

“The drive to be part of an ‘in crowd’ is so profound that many people will engage in self-destructive behaviour to obtain access or increase status in certain communities,” Jagolinzer said. “Crypto influencers exploit this and can financially profit from their flock of believers.”

He also stated that crypto trading is disproportionately dominated by young men, which is what led to the popular term “crypto bros.”

The drive to be part of an ‘in crowd’ is so profound that many people will engage in self-destructive behaviour to obtain access or increase status. Crypto influencers exploit this and can financially profit from their flock of believers.@CambridgeJBS

— Alan Jagolinzer (@jagolinzer) June 25, 2024

TikTok Algorithm Fuels Crypto Influencers Boom

With over a billion users, mostly young adults, TikTok offers crypto influencers a massive and targeted audience. The platform’s algorithm ensures content reaches those most interested in a targeted space. This makes it a prime ground for engaging the next generation of investors.

TikTok has itself dipped its toes into crypto, partnering with creators for NFT launches.

Cryptocurrency names too are getting creative, some bordering on the bizarre, according to Jagolinzer. He mentioned coins named after religious figures (JESUS), internet jokes (FART), and even politicians (King Trump).

The trend extends to pop culture icons (various Elon coins) and even regulatory figures, with some coins named “Good Gensler,” likely a sarcastic jab after SEC Chair Gary Gensler, known for his skepticism toward crypto.

Professor Raises Concerns About Influencer-Driven Markets

The professor cited another that exposes a potential tactic crypto influencers use. It involves manipulating followers into buying a specific cryptocurrency, causing a temporary price surge before the influencer sells their own holdings and the price plummets. This is also known as a pump-and-dump scheme. It effectively allows the influencer to profit while their followers suffer losses.

He also delved into even bigger concerns surrounding crypto influencer communities. He argued that cryptocurrency operates as a fundamentally populist movement. Populism, he explains, inherently weakens existing regulations and stability measures because its followers distrust these very structures.

Crypto leaders are sometimes revered like cult figures, granting them immense sway over their communities, he pointed out. For instance, Vitalik Buterin, who developed Ethereum, has been hailed as “the public intellectual the tech world needs right now.”

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