TikTok Slaps its Way Toward Crypto Influence Supremacy

Crypto influencers and businesses give their POVs on the FinTok phenomenon and its impact on retail investing. 

Where do people go to learn about cryptocurrencies? The knee-jerk answer to this question may say more about who you are asking than the dynamic reality of social media.

Image source: CryptoHead, data current as of May 2021.

If you look at the numbers, it’s pretty clear what the secret to Armstrong’s success is -- his TikTok reach in May 2021 is higher than Justin Sun’s powerful Twitter reach. Among the top 5 on the list, BitBoy is the only one to have really seized the power of TikTok in terms of reaching a new audience.

We asked Ben Armstrong, Founder & Host of Bitboy, for a response to his new status, and he responded: 

“It’s a humbling honor to be the #1 rated influencer in crypto. This truly is not about me though; it’s about my community the BitSquad. We have built a beginner-friendly and accepting community that serves as a grassroots movement ushering in crypto adoption across the world,” Armstrong said. 

It’s worth noting that the figures noted in the chart are already outdated -- Bitboy’s audience is expanding rapidly. The channel now has 410,000 Twitter followers, 222,000 on Instagram, and has just crossed the 1 million subscriber threshold on YouTube. 

Is TikTok’s Influence a Positive Thing? 

It’s easy to underestimate TikTok -- according to a recent report by DreamGrow Facebook has a massive 2.74 billion users, YouTube has over 2.2 billion, and Instagram has 1.2 billion users. Those numbers make TikTok’s 689 million active users look comparatively humble. However, TikTok is big on engagement. It’s content is short-format, highly visual, easy to browse, and compelling especially to Gen Z and Millenials.
Since 2020, TikTok has shown its strength in creating coordinated action among users -- it brought us thousands of young people dancing to Cardi B  and made sea shanties relevant with ShantyTok. Really, check out The Wellerman if you missed that one.
What’s even more telling is the way KPop fans used TikTok to coordinate user actions on Twitter and effectively block alt-right hashtags on Twitter, which they did throughout the 2020 election season. Anyone with familiarity in marketing can tell you how difficult it is to make anyone leave one platform to take an action on another platform. TikTok users form strong parasocial relationships with creators on the platform. They take dubious cooking advice and slightly less dubious self-help information and a lot of dancing, singing, music, and silliness. 

They also form de facto Robinhood investing groups to drive up the price of Gamestop, along with Reddit. Now FinTokers are ready to take the cute and loveable Dogecoin “to the moon.”

TikTok is big on excitement, with a growing user base that creates motivated communities. It doesn’t need to be as big as Facebook or Twitter. Five minutes spent “doom scrolling” Twitter or Facebook will demonstrate how fractured and often quarrelsome those audiences can be. TikTok moves large numbers of motivated, mostly young, people with coordinated grace.

The crypto contingent of TikTok have been dubbed “FinTok” and they are a force to be reckoned with -- but are they a force that is helping new retail crypto investors?
Rachel Siegel, known as CryptoFinally on Twitter, YouTube, and Instagram, remains unconvinced as to the quality of information found on FinTok.

“There is a ton of information on the internet, the danger of TikTok is that you are only listening to influencers and people who have made a boatload of money. The best thing you can do is broaden your perspective and take a larger look at what you're investing in. There are tons of projects out there, you won't hear about them all on TikTok,” Siegel said. 

To clarify, Siegel’s objections to TikTok are less a condemnation of the creators on there (let alone creators like BitBoy, which launched on other platforms first) and more a reminder to new retail investors to do their own research and not put all their trust in just a few creators making short-format videos. 

“Yes, there are moon missions you can jump on, yes, there will be influencers who have made unbelievable amounts of money, but for the average retail investor, this can be dangerous. Misunderstanding the market that you are investing in can be costly, the number one thing I recommend for all newbie retail investors is to do their own research and make their own decisions,” Siegel said. 

Siegel added that she has chosen to avoid TikTok as a platform due to concerns over data security. 

Crypto influencer Scott Melker, known as “The Wolf of All Streets” is similarly skeptical of the impact TikTok has on new investor behavior.

“Millennial and Gen Z traders are notorious for their interest in meme stocks and coins, having pumped overvalued assets like GameStop and DOGE to the moon. Wall Street is scrambling to combat the power of retail traders who are willing to buy jokes and hold with diamond hands come hell or high water. This behavior is largely being promoted on social media, with TikTok at the center of the craze,” Melker said. 

Exchanges like Canada-based Bitbuy have embraced TikTok as a way of reaching new crypto investors with educational content. 

“Our content on TikTok focuses on Crypto 101, and engaging developments in the crypto industry. We leverage short video format, alongside on-trend content, and viral sounds on the app,” Jordan Anderson, COO of Bitbuy said. “The younger demographic is more aware, and susceptible to content that helps them build their wealth at an earlier stage in their lives. There is a shift for crypto exchanges to not only focus on the seasoned trader segment but the younger pool of user base as well.”
Anderson believes that TikTok is a positive influence, creating a new generation of retail investors that take building their holdings more seriously at a younger age.
“Millennials and Gen Z are fast learners and have profound access to tech, and therefore will adopt investing or trading in crypto from an earlier stage in their lives, and it will become a pillar in their lives, and for future generations to come,” Anderson said. 

Deacon Hayes, founder of Well Kept Wallet, has also been using TikTok to reach younger investing audiences. He believes that TikTok is changing user behavior for the better. 

“Retail investor behavior is changing because of what people are viewing on TikTok… Teenagers are getting into investing in Cryptocurrencies just because they saw a TikTok video on how it could potentially make them rich… They invest in NFTs and Crypto because they are new and have the potential for exponential returns. The challenge is there is a lot of risk and not all Cryptocurrencies are created equal,” Hayes said. “It is important for people to realize that this is not a good sole long-term investment strategy… Do your research and make sure you invest your money wisely and don't gamble with your future.”

Justin Kline, the co-founder of Markerly, an influencer marketing agency, is unapologetically bullish on the hype machine that is TikTok. 

“It's VERY hype-driven. Everyone wants to pile onto the next pump and dump and social media is becoming the primary forum for such discussions. TikTok is absolutely helping to drive hype. It consists of a younger demographic who are more likely to allow their emotions to dictate their investment decisions,” Kline said

Kline pointed out that “bubbles” are not a phenomenon exclusive to crypto -- and that perhaps the fiat bubble of USD is the one to watch. 

“Currently the Federal Reserve is printing an unprecedented amount of money which is already beginning to spike inflation. That's why Bitcoin has taken the stage this year -- it has a fixed amount. It's also interesting that many people are talking about how crypto is a bubble but none of them are considering that perhaps the true bubble is a fiat currency – a bubble that might be popping before our eyes,” Kline said. 

Conclusion

Whether you like the style of content or not, TikTok is here to stay. Since its launch in 2016, it has increased exponentially in users and downloads, becoming one of the most popular apps in the Apple Store. It’s true that its audience is mostly younger -- according to Statista, in 2020 more than 62% of TikTok users in the US were between 10 and 29 years old and just 7% were over age 50. This was a conscious choice on the part of the creators who were targeting a younger demographic with the high-energy, short-format, video-driven platform. 

Clearly, the TikTok audience is becoming a formidable buying block. For influencers, investors, and blockchain businesses, it seems a greater risk to ignore this audience than it is to engage with it. The platform shows no sign of slowing down -- even when the 45th U.S. President tried to ban it. 

Perhaps traditional and institutional investors would be well served to open an account and see what these kids are saying. Even if you are disinclined to join in the frenzy, it seems prudent to keep an eye on what they are doing so the next Dogecoin to hit terminal velocity doesn’t take them completely by surprise on its way to the moon. 

Cover modified image by iXimus from Pixabay