“A dragon is not a slave“, Daenerys had thundered to the slave master. A dragon does not bow down even when shackles tighten around its feet, but a simple “Dracarys” from the Mother of Dragons makes it unleash that leaves a carnage behind. For fans of the fantasy potboiler Game of Thrones, it is fairly common to see the Khaleesi’s eyes gleam in the wake of the havoc her children wreak. Should crypto enthusiasts also get used to a similar Khaleesi’s commandments, albeit from behind the scenes? The recent spate of pump and dump scenarios in Bitcoin might suggest so. Bitcoin, much like Daenerys’ dragons, comes with a promise to reap great benefits for the one who controls its rein. With pump and dump schemes skyrocketing in number, Reddit users and crypto insiders have begun wondering if the crypto industry also has a Queen that rides the dragon and if she just might be a lobby of influencers pulling the strings.
In the millennial age, social media influencers are the key to good marketing. With their number of followers jumping with every tweet, picture or endorsement, the influencers are the modern day marketing middlemen. Replacing celebrities and known faces in advertisements, these people are the favourite relatable content creators for the Twitterati and other social media platforms. The crypto scene is as affected by this trend as any other industry and ICOs must tap the goldmine of their followers to make a mark. Indeed, websites like Meltwater and Tomoson even provide a fee-based service for brand and token endorsements in crypto. However, the practice has raised more eyebrows than Daenerys’ dragons when they breezed into the skies of King’s Landing. Crypto laymen eagerly wait for the wise words of crypto influencers and if any of it turns out to be motivated by sheer profit and no substance, it is the investor who is the loser. Clearly, with such control over the market, many influencers have the ability of promoting pump and dumps and turns out quite a few of them might have given in to the temptation.
Usually crypto traders offer advice that looks free from a distance. However, as the saying goes, there’s no such thing as a free lunch and the influencers profit by buying peak shares even before uploading the tips or by providing referral links to exchanges. While these are practices out in the open for everyone to see, it seems some of the others have shown less integrity. Many of them serve as shills, or wingmen to swindling schemes and dupe the investors, driving up the price so that they can drop their own shares like hot potato. A name that finds frequent mention in these pump and dump situations is John McAfee. A self-professed and vocal supporter of Bitcoin, the founder of the eponymous antivirus software has been allegedly involved in promoting scam ICOs such as Pink Taxi. With half a million followers waiting to act on every commandment he makes, McAfee is a classic case of great responsibility following in the train of great power. Is he fulfilling it with sincerity? It doesn’t seem so. Many Telegram trading groups even have recommendations to activate McAfee’s tweet notifications, such is the extent of this clout. His exhortations to invest in a certain token has often triggered immense frenzies among investors, sending the prices soaring for the skies. In May this year, the software ex-honcho had tweeted about a “coin of the week” which spawned numerous similar ones by other smaller influencers, leading to flash pumps in a number of coins. McAfee blamed the tweet about Ripple’s viability on an alleged hacking of his account, but by the time he supposedly recovered it, the token had already jumped up by 8%, jostling Bitcoin Cash out of the way to become the third largest cryptocurrency in terms of market cap.
Even if we were to believe that influencers are not trying to shill coins and on the market, their remarks can have immense ramifications on the market standing of various coins. Hence, advice must be dispensed more cautiously. The fake news of Vitalik Buterin’s death had also stirred up quite a storm in the prices earlier this year, proving once again that whether they want the thorny throne or not, influencers are the power that rides the dragon skywards. It remains to be seen whether the repeated pump and dumps see the Bitcoin market lose its flair, or if like, a true dragon, it survives the fire, and soars to safer skies.