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Social media popularity and cryptocurrency price trends are joined at the hip. This fact is true both in the extreme representations like Dogecoin and the standard cryptocurrencies that dominate normal discourse.
There is a case to be made that cryptocurrency could not grow this big were it not for the social media age. Bitcoin’s rise as a peer-to-peer coin took off in the early 2010s as Facebook and Twitter became part of everyday life. Meme coins like Dogecoin and PEPE are recent trends that perfectly illustrate the power of social media popularity and notoriety for cryptocurrencies.
Meme Coins As The Ultimate Symbol Of Crypto Notoriety
Around 2019, Elon Musk and a few other Twitter (now X) users started making jokes about Dogecoin. Soon enough, this meme coin went off and had rallies of over 1000% on specific days. Dogecoin would rally because its community of users were on board a rocket ship “to the moon.”
Meme coins like PEPE capture this connection very well. PEPE is inspired by the “Pepe the Frog” meme popular on right-wing chat boards. Once the PEPE token launched in mid-2023, it was an instant hit because of the power of the underlying meme. As of September 2024 PEPE has a market cap of $4 billion according to Binance. This makes it the 27th largest cryptocurrency in the entire market.
Cryptocurrencies benefit tremendously from social media traction. It is probably the most direct way of gauging crypto market sentiment and confidence. Some of this activity is unfortunately not organic and is part of elaborate pumping schemes by token promoters.
In a general sense, cryptocurrencies experience volatility based on social media activity. The ones that rely the most on social media sentiment experience the highest volatility levels. It is not surprising that Dogecoin had dramatic crashes after its historic rallies in 2019 and 2020.
Social Media And Crypto
The crypto sector started as a fringe sector in specific corners of the internet. It took around three years after Bitcoin launched for it to begin getting traction. In 2013, an infamous event occurred with the shutting down of the Silk Road marketplace which was a libertarian trading hub for all goods, including illegal items using Bitcoin.
Regardless, the marketplace displayed the power of internet socialization in crypto usage. This was a community of users that interacted in a decentralized manner and managed to pay for goods and services using virtual currencies.
Bitcoin quickly became a social media topic, and by 2017, Bitcoin price became a constant topic on Twitter. In late 2017, Bitcoin had its first epic rally in the social media age and caught the imagination of netizens.
Hype Is Key In Crypto
For traders, the challenge is understanding which cryptocurrencies have organic social media hype. Crypto traders will always talk up their investments, and it is tough to filter out the noise from genuine enthusiasm.
Social media has played a pivotal role in propelling this industry to where it is. After all, there is no way an asset class outside mainstream finance could establish itself without social media. A balanced way to use the information is to use social media traction as one of the parameters of a cryptocurrency’s performance rather than the sole determiner.
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