This is an editorial of the opinion of Thierry Berger, a graduate of The University of Applied Sciences in Business Administration Zurich, based on his thesis “Bitcoin: How Social Media Influences Private Investors In Their Actions.”
A friend introduced me to the basics of Bitcoin years ago. I couldn’t believe my eyes when I looked at the price increase in the last few years after our conversation and I wondered: Is this alternative currency going to continue to increase in value, or is it a huge Ponzi scheme that will soon collapse in on itself. ?
I started reading up on the topic and quickly realized that Twitter influencers often play on the emotions of their audience – with fear and greed, to name the most common. I can hardly believe some of the exaggerated posts, and yet they appeal to me.
It is clear to me that social media has influenced private individuals in their actions when it comes to Bitcoin. In my studies, I learned about many theories and models of media psychology, which I can apply to the Bitcoin market and can help others do the same.
Media Psychology Concepts And Bitcoin Twitter
The uses-and-gratifications theory assumes that recipients choose the medium that best satisfies their needs. Depending on the medium, a person is looking for information, entertainment, personal identity (strengthening one’s own values) or integration and social interaction (exchange with like-minded people). For me, I immediately mixed the four motives.
The concept of involvement, which suggests that a recipient can still be involved in the content of an article even days after reading it, if that person is directly affected by the developments or views represented. However, this does not mean that attitudes can be permanently changed. The more involved a person is in the judgment on a subject, the less he is influenced by persuasion from other opinions. The interplay between the emotions of greed and fear and the resulting experienced stress diminishes over time and with experience.
Around me, everyone, without exception, testifies to this phenomenon. After your first bitcoin purchase, for example, you are easily influenced. The more time you deal with the matter, the stronger your opinion becomes. You can accept price distortions more easily and, in the meantime, see the incentive to buy sats at a lower price.
Staying mindful of why you’re on Bitcoin Twitter in the first place, and how the content there affects you, will help you navigate it.
How To Manage Bitcoin Twitter
The huge price gains are, in my opinion, the strongest narrative that attracts retail investors to the bitcoin market. The most common type of posts I see on Bitcoin Twitter are positive price forecasts. This generates clicks, has the potential to trigger fear of missing out (FOMO) and entices private investors to make immediate purchases.
How strongly an individual reacts to information with a positive connotation, or to information with a negative connotation in a period of rapid price decay, and whether an action results from it, ultimately depends on motives and experienced emotions of a recipient, as well as the nature of the influencers consumed. But the inherent human nature of being guided by emotions means that new investors can pay the highest prices at the end of an upswing and sell these positions at losses when the prices are right, out of fear. in a total collapse. This is why anyone entering the Bitcoin space in this way needs to keep in mind the psychological factors at play.
One suggestion I have is to stay mentally strong. When a person’s investment goes into the red, their mood usually drops. But losses and gains don’t happen if you don’t cash out. But I think four out of five people don’t hold it, emotionally. That’s where you have to be tough as nails. There is an old wisdom that every private investor should learn: You can’t have two things, the top and the bottom. “Just doing nothing” historically works best in a market that rises in the medium to long term.
Another valuable lesson for me was the realization that, in today’s globally connected world, it has become increasingly difficult to separate clickbaiters and scammers from valuable content with strong communities. This means that someone who wants to learn about Bitcoin through Twitter must first do the work of “separating the junk from the good sources” in their own research. An investment should not be made based on just one opinion or source.
Manipulation Through Media
Manipulation by the media is by no means a new phenomenon and the history of the media shows that it can hardly be eliminated by regulation.
But social media accelerates the impact of contributions and expands spheres of influence, which accentuates the problem. My goal is to encourage critical engagement with the media, even knowing that, globally, this is a difficult endeavor. After all, the ability to critically examine the media and one’s own emotional reactions can be a great benefit in all areas of life.
This is a guest post by Thierry Berger. The opinions expressed are their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.