Modern Australian

Influence of social networks on financial markets - Octa overview

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 14 February 2024 - Social media can have a significant—sometimes critical—impact on the reputation of public companies and their quotes. Influencers in the cryptocurrency space frequently have a considerable influence on the value of cryptocurrencies.

For more information, read the article. In modern conditions, social media create an environment in which the principles of interaction between people are fundamentally changing. Today, everyone can instantly interact with a lot of people via social media—which can have a significant effect on the reputation of public companies and their quotes.

Octa

First calls, and dive deep into the story

The first case that exposed the potential threat of social media to the financial industry occurred in 2013. At 1:08 p.m. on 23 April, a fake tweet from a hacked Associated Press account stated,Two explosions at the U.S. White House, Barack Obama injured. Stock prices immediately plummeted, wiping out the value of the S&P 500 by more than 0.9%, or $130 billion, in less than three minutes. This was the first such case on Twitter, and as is often the case on Twitter, it was brief and superficial. The Associated Press itself was quick to clarify the false nature of these messages, and the White House confirmed it, and the markets recovered the next day.

Social media as a political tool
Another striking example of the impact on financial markets through Twitter is the messages of the former U.S. President, Donald Trump. He used his Twitter account to report crucial economic news and repeatedly threaten Chinese officials with tariff hikes, at times causing market and investment turmoil.

According to Bank of America Merrill Lynch, U.S. stocks have tended to fall on days when Trump tweets more than 35 times and rise on days when he tweets less than five times. JPMorgan even created Volfefe Index, playing off Trump's viral typocovfefe he tweeted in 2017, to track market movements in response to the president's social media activity. During Donald Trump's most significant social media activity, JPMorgan noted thattweets have increasingly moved U.S. rates markets immediately after publication.

‘There is indeed a correlation between trader sentiment, which can be evaluated based on tweets, and market movements—a 1% increase in the 'negative sentiment' indicator is followed by a 0.03% drop in the exchange rate,’ said Kar Yong Ang, the Octa financial market analyst. 'However, the effect does not last more than an hour—the tool is therefore unsuitable for longer-term forecasts,' he added.

During Donald Trump's presidency, major financial conglomerates created particular indices that tracked the correlation between his tweets and volatility in the U.S. stock market. Now, updating of these indices is on hold as it has been almost three years since Trump last tweeted about the news and the economy as a U.S. president.

Previous presidents have not maintained the same social media presence—and some critics suggest that Trump's tweets have put inappropriate pressure on politically independent bodies such as the Fed. It all resulted in a permanent erosion of central bank independence during Trump's term, as investors no longer perceive the Federal Reserve as independent of the executive branch.

This reinforces that a strong media personality is an opinion leader and can influence capital markets.

The impact of social media on cryptocurrency prices
The rise of cryptocurrencies has become a big deal in recent years, and it's impossible to overlook how social media affect market patterns and price movements. Social media has played a significant role in encouraging the use of cryptocurrencies for payments. Users often share information about the latest market trends and developments on prominent cryptocurrency discussion sites, including X (former Twitter) and Reddit.

Influencers in the cryptocurrency space often have a significant effect on the value of cryptocurrencies, especially minor altcoins, as followers value their opinions and may decide to invest in specific cryptocurrencies due to their advice. However, it can also lead to market manipulation andpump and dump scams, where influencers artificially increase the price of a cryptocurrency before selling their assets profitably.

Memes are another way social media influences cryptocurrency prices and market movements. On social media, memes are a common way of communicating, and memes about cryptocurrencies have been viral in recent years. For example, the famous ‘To the Moon’ meme is used to convey enthusiasm about the potential of a particular cryptocurrency.

While memes may seem like innocent entertainment, they can have a big impact on the value of cryptocurrency. A certain cryptocurrency may rise in value because of the hype that memes can generate. However, if the fundamentals behind the enthusiasm are strong, the promotion may only last for a while, and prices may plummet.

As we can see, the penetration of social media in the financial world is intense and is only getting stronger every year. In addition to classical fundamental and technical analysis, a third dimension is emerging, through which it is possible to track short-term price changes and use this information as an additional investing opportunity.

Hashtag: #Octa

The issuer is solely responsible for the content of this announcement.

Octa

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries who have opened more than 42 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, Octa received the ‘Best Forex Broker Malaysia 2022’ and the ‘Most Reliable Broker Asia 2023’ awards from Global Banking and Finance Review and International Global Forex Awards, respectively.

In Singapore, Octa received the ‘Broker with the Fastest Withdrawal Singapore 2023’ and ‘Most Secure Trading Platform Singapore 2023’ awards from International Business Magazine and World Business Outlook, respectively.

Driveree App Expands into Food Delivery with Exciting Discounts and Growth Plans

Victoria, 15 Nov 2024 – Driveree, the innovative app transforming food delivery services in Geelong, Victoria, is now making waves across the coun...

Choosing Affordable Office Cleaning Services with Flexible Contracts

Maintaining a clean work environment is essential not only to the morale and productivity of the employees but also for cost reasons, since cleani...

Tips for Managing Business Funds in High-Interest Accounts

For entrepreneurs, astute fund management extends beyond survival alone—it fuels expansion and ensures ongoing viability. A shrewd tactic involves...

Understanding Regulations and Requirements for Building a Granny Flat

Constructing a granny flat entails understanding and complying with regulations that may differ depending on the area you're, in Here is a breakdown...

Top-Rated Criminal Lawyers in Brisbane: Securing Legal Defence and Justice

Navigating the legal landscape, particularly in criminal defence, is an intricate journey that demands experience, expertise, and a deep commitment ...

Innovative Solar Conduit Solutions: Why Solarflex Stands Out

When it comes to solar installations, efficiency, safety, and regulatory compliance are essential — particularly when tight schedules and diverse en...

Loaded Potato Snacks: Perfectly Crispy French Fries and Air-Fried Hash Browns

Are you craving a crunchy, flavorful potato snack that goes beyond the usual French fries? Let me introduce you to two of my favorite recipes: Loade...

Bulk Liquid Storage Tanks: Essential Solutions for Modern Industry

In industries where managing large quantities of liquids is a daily requirement, bulk liquid storage tanks play a vital role. These tanks are desi...

Bistro Blinds for Seasonal Changes: Adapting Your Outdoor Space

Bistro blinds are outdoor designs that can be adapted for seasonal changes. They warm up the environment by making it wind-free, wet-free, and sun...

Advantages of Using Digital Printing Services

The demand for quick, efficient, and high-quality printing solutions has seen remarkable growth in our modern, fast-paced world. This increasing nee...

Benefits of Professional Strata Management

Navigating the complexities of strata management can be a daunting endeavor for any strata property owner or committee member. Strata management inv...

The Hidden Benefits of Bundling Utilities with Moving Services

Moving can feel overwhelming with so many things to juggle. Hiring a moving company in Brisbane helps make it easier, but did you know you can make it...

Family Mediation: The Path to Resolution, Healing, and Lasting Solutions

In an era where family challenges are often met with emotional and financial strain, family mediation has quietly gained traction as a life-changing...

Surprise Party Ideas That Will Leave Your Guests Speechless

Throwing a surprise party is one of the most exciting ways to celebrate a special occasion. The thrill of keeping it a secret combined with the joy ...

“North of the River” Vs “Over the Bridge” – What’s in Brisbane’s ongoing North Vs South Feuds?

Greater Brisbane Australia’s largest capital city by land area, coming in at 15,824 square kilometers, and ranks number three worldwide. It has Au...

Income Stream Integration: 7 Ways to Earn Money Through Your Website

Whether you sell Vietnamese coffee, review Japanese gadgets, or rent Melbourne self storage, your website is more than just an online presence—it...

Top 10 Benefits of Practicing Taekwondo for All Ages

Taekwondo is more than just a martial art; it’s a way of life that offers profound physical, mental, and emotional benefits. Whether you're a chil...

Plasterboarding and Ceiling Repair: The PlasterX Advantage for Long-Lasting Results

Contacting professionals who are well-versed in the nuances of the task is essential to preventing headaches during plastering ceiling repair work. ...