The results of a joint study by experts from Harvard Business School, Indiana University Business School and Texas A&M University showed that the long-term investment value of tweets from popular crypto influencers not only tends to zero, but can lead to loss of funds.

A team of specialists from three educational institutions analyzed about 36,000 posts on the X network on behalf of 180 of the most popular and influential people in the crypto community. The publication study was limited to a two-year period ending December 2022 and covered more than 1,600 digital assets.

“We have strong evidence that advice from influencers about investing in cryptocurrency is, on average, unprofitable. This confirms regulators' concerns that social media may mislead retail investors are legitimate. People who represent a large share of the overall crypto market and for whom financial losses can be especially devastating from a financial and social perspective. The future of cryptocurrency cannot be built on viral tweets, and conscious investing in digital assets is a long marathon, not a sprint to the moon,” it says
in the findings of scientists.

Scientists state: influential bloggers are interested in public attention and income from integrations with brands, and social platforms earn their share from advertising revenues. At the same time, both parties to the process are interested in making a quick profit and do not set themselves the goal of disseminating useful advice.

This trend is most pronounced among self-proclaimed crypto experts who have a large number of subscribers in X. These individuals actively exploit public sentiment, create excitement and give recommendations to buy, suggesting the possibility of manipulation and misinformation of unsophisticated investors. One of the most troubling findings of the study was the significant negative long-term returns on such financial advice.

For example, over the long term, the average cumulative returns 10 and 30 days after posting a promotional tweet are -2.24% and -6.53%, respectively. A rough estimate shows that if an individual invested $1,000 in a cryptocurrency asset that was not in the top 100 on the date of the tweet, and then held for thirty days, it would result in a loss of $79 (7.9%; 62.8% annualized ).

Thus, the only way to profit is by exiting the position shortly after the tweet is published. However, this strategy may not always be feasible due to insufficient market liquidity and artificial limitations of the cryptocurrency project.

In January, experts from the information security company SlowMist reported that, according to their observations, about 80% of the comments under the publications of cryptocurrency project accounts on the X network belong to a variety of attackers.