Digital currencies are becoming more valuable, perhaps untenably so, and Bitcoin is hardly the only one enjoying returns that would make even the most seasoned gold bug clutch at their pearls.
There are thousands of smaller cryptocurrencies out there, called "altcoins," that have been buoyed by Bitcoin's high tide. They're the penny stocks of the cryptocurrency world—cheap and volatile, but potentially lucrative if you can get in and out at the exact right time. In this Wild West, tech mogul and gutter libertine John McAfee—who now goes by the title "Chief Cybersecurity Visionary" at MGT Capital—is leveraging his large Twitter following (655,000 at the time of writing) to position himself as an investment guru of sorts for these small-time cryptocurrencies by promoting them on Twitter. McAfee has a volunteer staff of "smart kids," he told me over the phone, to vet the coins.
With someone as famous (or infamous) as McAfee weighing in on these wildly volatile markets, I had to wonder: Just how influential is he, anyway, and what are the real effects of his tweets? In the frothy whirlpool of altcoin valuation, it appears that one man and a tweet may be able to move an entire market.
I collected all of McAfee's promotional tweets from December 15 until now and compared them against the price histories of the digital currencies he promotes. (He also promotes plenty of ICOs, but I limited myself to coins since price charts make those easy to analyze.) After review, tweets from McAfee were reliably correlated with price spikes that sent cryptocurrencies worth pennies—even fractions of a penny—temporarily shooting upwards in value anywhere from 50 to 350 percent.