Understanding the influence of social networks on Forex





2.80 billion. This is the number of monthly active users on Facebook, the number one social network in the world. It is therefore impossible to lose it, but above all impossible for the financial markets to ignore social networks.

Let’s take a look at how social media can affect Forex and cryptocurrencies. In this article, we focus on the Twitter and YouTube networks, which play an important role in the lives of modern investors, and we focus on the “king” of crypto tweets, aka Elon Musk.

What is forex?

Word Forex arises from the contraction of “foreign” and “foreign exchange market”. Sometimes called FX, it is the trading of different currencies on the global market. Its market is open 24/7 as the various exchanges around the globe alternate.

With a daily exchange rate of around $ 4 trillion, it is the largest financial market in the world, but also the easiest to trade. This is why Forex often proves to be an attractive choice for novice traders.

Forex is decentralized, it is therefore not managed by a higher authority and is comparable to other financial assets. Its market knows fluctuations, rises, falls, it can be bought, held and sold at will.

FX is used both by companies looking to make international purchases, but also by individuals who wish to exchange their currencies at the best price.

It should be noted that some platforms today allow users to trade up to 80 currency pairs in forex, from the most common to the most exotic. There are more common currencies such as the dollar and the euro, but also less common currencies such as the Yemeni rial or the Lebanese pound.

How Do Twitter and YouTube Affect Forex?

In 2021, 75.9% of the French population was on social networks, or more than three quarters of the French. Of these, more than 12 million are featured on Twitter and more than 46 million use YouTube. It is therefore not surprising that the “trading life” is gradually found on Facebook, Twitter, Instagram, etc.

Twitter

Created in 2006, Twitter quickly positioned itself as the social network that provides information in real time, if not immediately. However, on Twitter as elsewhere, and on the Internet in general, it is sometimes difficult to distinguish between verified information and fake news.

Enjoying the popularity of Twitter, and therefore its vast community (199 million daily users worldwide), political figures and influencers do not hesitate to publish their ideas to share them with a wide and varied audience. For example, it is Barack Obama’s Twitter account that has the most subscribers, with over 112 million subscribers in total.

The speed of the added network as well as the size of its community therefore make it a means of considerable influence that traders must take into account in their daily life to anticipate their future movements on the markets.

Youtube

Since 2005 the YouTube platform has evolved and so has the way we consume multimedia content. Everyone uses YouTube, or nearly so, and the trend has been for videos for quite some time. It is therefore not surprising that Google’s social media ranks at the top of the web’s most influential networks.

However, YouTube’s paradoxical problem is its users. How many professional Youtubers, in fact, today, have turned their passion into a job? And whoever says work says money. It follows that unfortunately some Youtubers are now paid to share an opinion or information that is not only not objective, but is sometimes completely false, or at best, inaccurate.



It is therefore important for the modern trader to be on his guard, and check the information he can find on YouTube, which is not always very reliable.

Elon Musk: “Guru” level on Twitter

Qualified by many as a genius, the second richest man in the world has not stopped talking about it in recent months, especially on Twitter. Showing 54.8 million subscribers on his account, Elon Musk recently reversed the tide of cryptocurrencies, and this, in some tweets.

Elon Musk
Source: Pixabay.com

Elon Musk and Bitcoin

It took just one tweet for Bitcoin’s value to drop by 8%. On June 4, 2021, Elon Musk tweeted the hashtag “Bitcoin”, followed by a broken heart emoji, along with an image of a couple contemplating a breakup, referencing a Linkin Park song. The consequence is immediate: BTC trades at $ 36,952.80 during the day, up from $ 39,244.90 the day before.

This tweet comes shortly after Tesla, the company he is CEO of, decided to stop accepting payments in digital assets.

Elon Musk and the Shiba Inu

Just three weeks after the Bitcoin tweet, the billionaire decides to do it again, but this time in favor of the Shiba Inu (SHIB). In a tweet on June 25, Elon Musk said: “My Shiba Inu will be called Floki. Whether or not it is an allusion to the SHIB, the price of the Shiba Inu, albeit then down, explodes by + 25%.

A fervent supporter of crypto-memes (cryptocurrencies created in reference to famous memes), Elon Musk positions himself here in favor of the Shiba Inu, to the detriment of the Dogecoin that he had actively supported in recent months. .

Elon Musk and the doge puppy

For once, Dogecoin (DOGE) also saw its value increase by about 10% starting July 1, after the Twitter Guru published “Baby Doge, doo, doo, doo, doo, doo”, in reference to the song “Baby Shark”.

Later the same day, Elon Musk tweets a photo from the film The Godfather, with the subtitle “Liberate il Doge”. Still browsing the memes, so popular on the Internet and also among his subscribers, the billionaire manages, once again, to overturn the value of a token, in a simple tweet.

What are the best practices to adopt?

The world is moving faster and faster, as is information. This is why it is important to be connected, to stay informed and above all to be reactive to the information you find on social networks.

Be careful, however, to verify the truthfulness of the data collected and not to fall into it fake news. Don’t hesitate to cross your sources and make a decision.

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