"What you had was an incentive for the entire Celsius community to look the other way when you see all these red flags about Mashinsky. It's for all the bag holders to claim he's the smartest young founder they've ever met," Klippsten told Insider. "The financial incentive of Luna to glorify Do Kwan. And often, they're distracted from their own financial interests with a narrative of popularity and social status. The desire to uplift CEOs and founders to the status of icons can blind users to potential risk in their investments, Klippsten said. LunarCrushĪll of the social siren calls and influencer pumping is amplified by crypto's many luminaries and industry icons, whose statements can warp the way people perceive value and risk.Ĭelsius's Mashinsky hosted weekly Q&A events on YouTube, where he routinely touted the safety of the firm's lending product, while Terra's Do Kwon cultivated a Twitter persona steeped in memes and edgy commentary.Ĭory Klippsten, a crypto veteran and the chief executive of trading app Swan Bitcoin, is a critic of the glorified leaders of crypto firms like Mashinsky and Kwon – both of whom, prior to their firms' implosion, enjoyed the status of minor celebrities.
![warp tour jacksonville warp tour jacksonville](https://i.ytimg.com/vi/hW5NhH0Srsw/hqdefault.jpg)
The volatility of the price of bitcoin shares a near-perfect correlation with mentions of the token on social media, according to social media analytics site LunarCrush. "Young people with audiences were actively the next meme token to their followers and the token price would go parabolic in a few days and then crash down," he said.Īccording to data from social analytics site LunarCrush, mentions of bitcoin on social media are almost perfectly correlated with swings in its price, with some correlation also seen with social mentions and the price of ethereum and Voyager Token. Digital assets came into the world at the same time as social media, so it's natural they're intertwined.Īnd social media activity can directly influence the price of cryptocurrencies by urging investors to jump in, Paul Delfabbro, a co-author of the study told Insider, pointing to the meme-stock craze of 2021 as an example of a similar phenomenon. "I am embarrassed, sad, and angry," the customer said.Ī 2021 paper on the psychological motivations of crypto traders notes that crypto is inherently influenced by social pressures, one of the largest being the fear of missing out. "I have always been a very conservative investor and invested to ONLY, because Alex Mashinsky has continuously stated, every Friday, that they are secure," one user writes, referring to Ask-Me-Anything sessions the chief executive held with the Celsius community.
![warp tour jacksonville warp tour jacksonville](https://i.ytimg.com/vi/0Nw1dSl3LWA/hqdefault.jpg)
In court letters, many customers have given up the prospect of getting anything back, lamenting the sense of community they once felt. Celsius owes $4.7 billion to its users, which includes creditors but also customers whose money was locked up when the firm became insolvent. "And they come to believe that they will be supported by this community of strangers, if things go wrong." "They tend to form this sense of community and a sense of belonging to these groups of people who are complete strangers," Dhlokia told Insider. Research by Uptal Dhlokia, a marketing professor who studies consumer psychology at Rice University, shows that social pressure within a community – such as the popular subreddit Wall Street Bets – can lead investors to buy into especially risky projects they otherwise wouldn't get behind. "But I was just like, well, they're smart and they know what they're doing and they've had no issues. "Initially I was a little skeptical … If it's too good to be true, it probably is," Fong said. Countless letters have made their way to the Southern District of New York from Celsius customers who say they were misled by the many public statements of CEO Alex Mashinsky that Celsius was safer than other investments.
![warp tour jacksonville warp tour jacksonville](https://media.altpress.com/uploads/2018/08/940ffc52-warped-tour-2018-new-photo-size.jpeg)
"That was a very rookie move to put that much into a centralized platform rather than like my own cold storage wallets." "It is embarrassing, just because I've been in crypto for so long," Fong told Insider. Her money was locked up in the now defunct Celsius crypto exchange, an amount worth $200,000 at its peak. Tiffany Fong, a retail investor in crypto, has mostly shrugged off her losses from the great crypto crash of 2022 at this point, but she still remembers the sting of embarrassment in discovering she'd lost a small fortune. The effect is amplified by icons and celebrity CEOs, whose comments can warp perceptions of value and risk. Research shows online communities and FOMO encourage investors to take out outsized risk. Social media allure is a big pitfall for crypto investors, experts say.