In the last 24 hours, two occurrences on social media platform Twitter were responsible for some significant volatility in the crypto market.
These tweets weren’t about the latest hack draining millions of dollars from a beleaguered bridge, or announcing some massive new release or use-case of a protocol, and had nothing to do with the fundamentals of a specific project, but they still had an impact on those investing in the relevant tokens.
Firstly, an SHA hash was tweeted by crypto influencer Cobie, a longtime OG in the crypto community, a founder of Maxcoin, a Bitcoin fork named after celebrity BTC Maximalist Max Keiser, and the co-host of the UpOnly podcast.
This SHA hash was a one-way function which was then decrypted - and there is some talk about how this happened - to reveal five simple words which caused some chaos in the market.
The words simply read “Interpol Red Notice for CZ.”
Now, this has been a pretty big deal, especially considering the background in which the US government appears to be going after Binance (and crypto in general) at the moment, and the effect was instant, seeing the Binance BNB token take a massive dump shortly after.
The thing is it appears to be an unsubstantiated rumour, as CZ confirmed there was no arrest warrant, and certainly no mention of him appears on Interpol’s board. Later, CZ came back out fighting on Twitter, tearing the FUD (fear, uncertainty and doubt) apart.
But this caused some pain for BNB investors, with around $50M of longs being liquidated as their stop losses were triggered as volatility raged for an hour or so, before making its way back to its previous value as crypto Twitter stopped panicking.
This is probably one of the best examples of how some unsubstantiated news can have a massive impact on volatility.
Around the same time that Cobie’s post was being leaked, chief Twit Elon Musk made some changes to the platform, replacing the famous blue Twitter bird logo with the DOGEcoin Shiba Inu logo.
Now, when Elon speaks, not only do people listen, but things happen in markets, and this was no exception. Almost immediately DOGE started to rocket from the $0.078 level it’s been sitting at for the last month right up to $0.10 as around $1.5B flowed into the original memecoin in the space of a few minutes.
And it’s not the first time the Tesla and Twitter owner has caused volatility to rage in the market. Some of his previous tweets have significantly moved markets, not least his offer (and then his pulling of the offer) to buy the social media platform back in April 2022.
Other notable Elon tweets include the famous “Tesla stock price is too high IMO” tweet in May 2020, which caused the price to lose 10% in a day, and his 2018 April Fools joke when he comically (but not for investors) tweeted that Tesla had gone bust.
There are so many possible causes of volatility in crypto markets that it seems somehow irrational that a single tweet of under 240 characters can sometimes be all it needs to cause a pump or dump in the market.
That said, Twitter is pretty much the go-to place for crypto news these days, and almost all of the following tend to play out in real-time on the platform.
For most traders stop losses are a valuable way to manage risk in the highly volatile crypto markets, but when sudden drops happen, particularly when they’re followed by fast recovery (as in the case of the BNB token we mentioned earlier) they can really piss you right off.
That’s why we’re building Bumper, a completely novel risk management tool. Bumper is somewhat similar to a combination of a stop loss, a Put option and insurance, but operates in a radically different way.
Bumper’s purpose is to protect your crypto from downside volatility whilst still exposing you to the upside. It’s incredibly simple to use, and you can open a position in just a minute without having to transfer your tokens to an exchange.
Bumper has a number of interesting use cases, for example, not only allowing you to be safe from sudden price drops, but also for protecting your profits when the market pumps, and you find yourself unsure as to whether it’s about to take a dive again or keep on going.
More importantly, Bumper doesn’t rely on being fast to get the news on Twitter. Sometimes it makes you wonder how some people seem to spend their lives on the platform, and you always seem to come to the party late. With Bumper you can simply set your protection, and get on with your day, even if you’re not one of the cool kids who’s always glued to the screen.
If you’re serious about making sure you don’t get Rekt thanks to the extremely volatile nature of the crypto markets, it’s worth investigating Bumper, and we invite you to join our community on Discord where you can ask questions and get the latest news and updates.
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