Social media sentiment sees gloomy crypto future

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 24 Nov 2022

Social media sentiment around crypto-currency has taken a knock since the collapse of FTX, the world’s third-largest crypto exchange.

This is according to market research firm GlobalData’s Social Media Analytics Platform, which tracks most relevant activity among selected Twitter influencers and Reddit channels. The platform uses a combination of artificial intelligence and human-based analysis to curate content.

Since the beginning of 2022, GlobalData says, the crypto-currency market has been impacted by macro factors, such as increasing inflation, which led investors to a large-scale sell-off, while they also avoided riskier assets.

In a recent incident, FTX, one of the world’s biggest crypto exchanges, filed for Chapter 11 bankruptcy protection in the US.

Against this backdrop, the market research firm adds, social media sentiment around “crypto-currency” plunged by almost 70%, touching the year’s lowest level this month.

At its peak in 2021, FTX, founded by Sam Bankman-Fried, had over one million users and was the third-largest crypto exchange by volume.

Since 11 November, FTX has been in Chapter 11 bankruptcy proceedings in the US court system, following a liquidity crisis.

FTX clients reportedly lost an estimated $1 billion to $2 billion after the crypto exchange went bust.

However, South African-based crypto exchanges recently told ITWeb that they largely dodged the FTX collapse bullet.

Trendline of social media discussions and net sentiment around crypto in 2022.
Trendline of social media discussions and net sentiment around crypto in 2022.

Below are a few influencer opinions captured by the GlobalData’s Social Media Analytics Platform:

Ian Brown, visiting professor at CTS-FGV, commented: “Also…crypto-currencies are going to die. There’s a limited amount of real money left…and as that money gets pulled out, there will be less and less…speculative activity. No one’s coming in with fresh capital, and Ponzi schemes without new suckers disappear.”

Peter Schiff, chief economist, said: “A year ago #Bitcoin hit $69 000. One of the main reasons for the spectacular rally was all the leverage that funded unprecedented #crypto advertising and speculative buying. The #FTX bankruptcy proves the entire rally was a fraud. It will never be repeated. Bitcoin mania is over.”

Paul Graham, computer scientist, stated: “A person I have known for more than 10 years, who I consider trustworthy, is convinced the crypto-currency economy will shortly experience a systemic risk. I don’t know anything concrete, but if I were exposed, I would be concerned.”