On X and popular crypto communities on Telegram and Discord, people often search for new investment opportunities and new emerging crypto projects, and influencers and KOLs are the most relevant voices in these spaces. Should I listen to crypto influencers and KOLs? The answer is no, because in most cases, they are paid by crypto projects to promote their token and companies, making them unreliable and biased in providing information. Conduct your own research to verify the reliability of the project, and don’t listen to paid promoters’ advice on investments.
Remember: If something is too good to be true, it probably is. KOLs and crypto influencers usually exaggerate a project's potential value and profit opportunities since they have a direct interest in making the crypto price grow. They probably invested in the project early and are looking to capitalize (sell) their token holdings once new investors buy the token. In investments, especially in crypto, your best ally is yourself: Only you can evaluate the underlying value and fundamentals of a project in an impartial way, gaining valuable information through research and analysis. Never listen to the advice of “your cousin” or from an X “influencer” since they have an interest in bringing in new investors to the projects to sell their holdings and basically “steal” your money.
7 Red Flags of Unreliable Crypto Influencers
At PlasBit, we don’t want to demonize all the crypto influencers and KOLs because some people, like the BTC advocate Michael Saylor, are actually expressing their own beliefs without being paid by crypto projects, and they could be considered reliable innovators in this field. However, the majority of KOLs and crypto influencers that promote “crypto gems early” are commonly paid to post tweets, incentivizing people to buy unsafe and unreliable tokens. But how do you understand if a crypto influencer is paid to promote an unreliable project in a manipulative way? Should I listen to crypto influencers or are they all scammers? Let’s explore some golden rules to verify if the opinions of a KOL or influencers are actually valuable or are only “shills”.
1. Using fake engagement
One of the biggest red flags of a crypto influencer or KOL is utilizing fake engagement to boost his social media posts to make them more authoritative and relevant. Considering that some KOLs and crypto influencers can be paid more than $500 per post, they can make a lot of money in the short term, especially if they collaborate with numerous projects. Consequently, many KOLs boost their engagement to attract more potential projects to collaborate with, but you can spot fake interactions keeping in mind some basic red flags, including always the same amount of post views, like, and RT, the weird ratio between likes and views (e.g. 300 likes with 1000 views), or AI and generic comments under their posts. Avoid taking advice from KOLs that use fake engagement at all costs.
2. Promoting memecoins and risky projects
Another golden rule is to avoid following and listening to influencers and crypto KOLs that promote memecoins. Even if memecoins are becoming a “cult”, the majority of them (almost 99%) fail after a few days or weeks. Teams behind memecoins create new projects continuously, leveraging the short-term attraction without providing benefits or utilities, leading the project to fail quickly. However, the meme coins team and KOLs usually collaborate to create pump-and-dumps projects literally. KOLs receive tokens in the earliest phase to promote the project, and once it gains traction, they sell their holdings, leading the project to fail. Don’t listen to or follow KOLs that promote this kind of project because they are basically trapping you in a pump-and-dump scheme.
3. Overestimating actual benefits
Another common rule is avoiding influencers that overestimate the benefits and the potential of crypto projects. If they promise that the project has a “revolutionary tech” or something like that, it’s commonly only to create hype and FOMO (fear of missing out), trying to bring more holders into the project before selling. Remember, if something is too good to be true, it probably is: If crypto influencers and KOLs claim incredible benefits and revolutionary tech, it’s probably just to attract new holders to the community. Projects with innovative tech don’t need ambiguous influencers to promote their project because word-of-mouth and organic growth would be enough.
4. Promising incredible returns
In investments, secure and “incredible” returns cannot be promised. Every investment brings risks, and it’s impossible to guarantee a secure, high return. If a KOL endorses a project and writes in his posts that people will make astronomical profits by investing, he is trying to lure you into bringing in your money and leveraging FOMO. Every conscious investor knows that performing better than the main benchmark of the stock market, the S&P 500, is very difficult; also, in crypto, the higher the profits, the higher the risks. Consequently, if, for example, he promises a 30% safe annualized return, as happened in the Ultron Mavie scam, he is a liar supporting a scam or unsafe project. Also in this case, use common sense and avoid being trapped in this evil manipulation, which commonly results in Ponzi scams.
5. Being involved in previous scams
Another typical red flag of KOLs and influencers is being involved in previous scams. If he had promoted a scam project in the past that was rugged and had stolen money from investors, it’s very plausible that he would have done it again. “A leopard can't change its spots”, meaning that a scam influencer will probably use the same manipulative tactics to try to promote another scam project and rob your money again. Remember also to verify with DYOR (do your own research) the past behavior of the KOL before trusting his information and “crypto gems” because he is probably very good at luring and manipulating people to invest their money in a new scam.
6. Promoting many crypto projects
If KOLs and crypto influencers are promoting many projects at the same time, it’s a clear signal that they don’t care about the projects and promote them only to receive money in exchange. Analyzing the fundamentals and the potential of a project is quite complex and requires time and effort. Consequently, it’s not so plausible that an individual KOL can analyze, evaluate, create content, and promote many projects at the same time. If he is promoting many projects, he probably doesn’t understand what he’s talking about and he is doing so only for money, even promoting scams or risky projects. Real supporters of a crypto project carefully analyze the potential and fundamentals of it, and if they believe in its potential, they are in for the long term. Conversely, unreliable influencers go from project to project without delving into it and promoting the highest bidder more and more.
7. Ignoring questions and comments
The last important red flag occurs when influencers don’t reply to important questions or criticisms about the project promoted. In this case, if the KOL ignores your question or deletes the comment, it is probably because you answered an uncomfortable question and he doesn’t know the answer or doesn’t want to open the discussion about a critical point. In this case, there is an important red flag that underscores negligence from the influencer or the project, and they are trying to hide it. A KOL who is promoting a legitimate and safe project should not have problems answering all the questions from the community. Conversely, he should be pleased to dive deeper into the technical details of the project to spread his knowledge about it. If the KOL is not transparent in his answer, consider him as unreliable and a potential scammer: Don’t listen to his advice, and don’t invest in the projects he promotes.
At PlasBit, we hope these popular red flags will allow you to evaluate objectively the KOLs and influencers that promote crypto projects on X and other social media platforms, aiming that you will be able to DYOR and avoid falling trapped in scams and risky projects. However, we must also underscore that not all the KOLs and influencers are actually scammers because some of them, such as Michael Saylor, can be considered reliable since they are not paid to promote a project. So, when can you consider a KOL or crypto influencer reliable and trustworthy?
5 Signs Showing that an Influencer is Honest and Trustworthy
Even if many (probably most) of the crypto influencers should be ignored because their opinions are biased and unreliable, we cannot demonize all the influential people in the crypto space. Some KOLs are actually honest and trustworthy, and they can be considered a reliable voice in this industry. After evaluating and excluding the possible red flags explained above, you can verify the following points to validate the reliability of the crypto influencer and understand if it’s worth it to follow him and his advice.
1. Transparency about sponsorships
If an ethical crypto influencer decides to collaborate with a project and receive payment to promote it, he should communicate that related posts are paid sponsorships. It’s a common good practice for honest influencers to include something like “This content is sponsored by XYZ project” to ensure the audience can conduct independent research to verify the correctness of the information and potential of the project autonomously. In this way, influencers can inform people to evaluate the project with a critical thinking mindset and consider the potential bias of the crypto influencer endorsing the project. Even if reading something like “paid sponsorship” could be weird, it highlights integrity and increases trust.
2. Deep knowledge of the project promoted
Reliable influencers don’t promote all the crypto projects that are willing to pay them. They often decide to collaborate only with projects that have solid fundamentals and reliable teams, reducing the risks of rug pulls, Ponzi schemes, pump-and-dump, and other types of crypto scams. Influencers who strongly believe in the projects they promote usually delve deeper into them to understand in detail how they work and what the potential for growth really is. They usually analyze and explain the whitepaper, the token economy, the team behind the project, the revenue streams, and all the other factors that contribute to making a project successful in the long term. If a crypto influencer has a good and deep understanding of the whole project, it commonly means that he believes in its growth in primis and that he’s not just simply paid for the promotion.
3. Consistency in advocacy
If influencers strongly believe in a project, they usually contribute to its growth in the long term, not just creating a couple of posts and making a retweet. Constantly supporting the project, both in the community and on social media, underscores the belief in long-term success. This means that crypto influencers sincerely believe in the potential, the philosophy, and the values of the project, making them ambassadors and not just occasional promoters. Consistency is often linked to integrity and underlying beliefs: If a crypto influencer supports a specific project in the long term, it’s plausible that he wants to support it not only because he’s paid to do so but also because he strongly believes in the growth potential.
4. No exaggerated claims
Another green flag is the avoidance of bold and exaggerated claims regarding the potential returns of the project. An honest KOL knows that every investment brings risks, especially in cryptocurrencies. Consequently, if he’s reliable, he probably will not make promises like “guaranteed returns,” “buy now until it’s too late,” “get rich quick,” or “get ready for the Lambo.” He should provide balanced viewpoints, analyzing both positive and negative factors, aiming to provide an unbiased and valuable analysis. It’s not ethical to promise high and secure returns, and if the influencer is honest, he will not make these claims. He should focus on educating users about the positive fundamentals and perspective of the project while also analyzing and communicating about the risks involved, allowing people to make conscious and balanced decisions.
5. Willingness to engage in debates
The last relevant green flag of a reliable influencer is his availability and interest in engaging with the community to explain and clarify doubts and questions. If the influencers and the projects have nothing to hide, they would be glad to see interest and questions from the community and see them as an opportunity to clarify doubts and explain in detail some technical and specific points about the project. As you can imagine, reliable and honest influencers prioritize discussions, feedback, and criticisms and aim to address them to improve the project and grow it together. Communities are the key element of Web3, and influencers that understand that are better positioned for being considered a relevant, reliable, and unbiased source of information, attracting larger and more affiliate audiences.
Final Recommendations for Crypto Investors
As you should have understood from the previous paragraph, the question “should I listen to crypto influencers” cannot be answered univocally. However, in general, you shouldn’t trust most of the crypto influencers since they are commonly paid and their opinions are biased, but there are some exceptions. Some influencers and KOLs can be effective guides if they have solid knowledge and understanding, prioritize integrity and community discussion, and avoid making bold claims about secure returns and promoting scams and risky projects.
Now, you’re ready to evaluate an influencer to understand if his opinions are biased and unreliable or if he’s honest and really believes in the project he’s promoting. However, there are some more recommendations to bear in mind before trusting a crypto influencer and listening to his advice.
Always verify the reliability of the influencer
Before following his suggestions about a crypto project, remember to verify the potential red flags that could indicate he’s not communicating genuine and honest opinions. Avoid fake and biased influencers because they will make you lose money on crypto scams and unsustainable projects.
Prioritize DYOR (Do your own research)
DYOR (do your own research) must become your mantra and guide in crypto investments. You are your best ally since only evaluating with critical thinking and different viewpoints can you assess the real potential of a crypto project. Never analyze only one source of information, but compare the opinions across multiple informational websites, communities, and social media. Try to get as many opinions as possible from multiple sources to create your own opinion without relying too much on a single entity that could be paid and biased.
Conduct fundamental and technical analysis
Every trader and investor, both in tradfi and cryptocurrencies, knows the importance of conducting effective fundamental and technical analysis. Fundamental analysis implies evaluating the underlying technology, team, whitepaper, potential revenue, and problems that the crypto project solves. In this way, you analyze the effective potential in the long term of the project to understand if its growth is sustainable and possible. Instead, technical analysis involves analyzing price charts and technical indicators to evaluate if a project is in an overbought or oversold phase, assessing the situation, and trading accordingly. In general, fundamental analysis focuses more on the long-term potential, focusing on investors, while technical analysis is more useful in the short term for traders.
Leverage communities to analyze projects
Even if DYOR is a priority, communities on X, Discord, Telegram, and Reddit can offer additional perspectives and opinions, helping you to have viewpoints from different groups of people. Especially for risky and unreliable projects, communities can help you review the project since some community members could have already lost some money and learned the lesson. We don’t suggest seeking advice in communities but rather hearing feedback from different people to understand the general consideration of that specific project. Communities are one of the key elements of Web3, and if most people are skeptical and angry about a specific project, it’s probably because it is unsafe and unreliable: Avoid investing in it even if some ambiguous crypto influencer is promoting it.
Be realistic and don’t fail in scams
As we always state: “If something is too good to be true, it probably is”. Avoid being trapped in unrealistic promises of easy returns because every investment involves risks and nobody can guarantee a high, safe return. Scams often leverage FOMO and the desire to “be rich quick” of people to manipulate them into investing large amounts of money in risky or scam projects. Analyze the project in a rational way and don’t act impulsively just because they promise huge profits. Be realistic in your evaluation to avoid being trapped in pump-and-dump schemes, Ponzi scams, or similar threats.
Invest only what you can afford to lose
Another important rule for investors is to invest only what they can afford to lose, meaning that you should be cautious in your investment and keep a reserve budget for your daily needs and possible unexpected expenses. A golden rule is to keep a reserve of 6/12 months worth of your salary to face unexpected expenses or difficult periods, such as a layoff, a recession, health problems, car accidents, etc. It’s important not to over-allocate your funds to investments if you need them for primary or family needs. A smart investor always keeps a “security fund” to have peace of mind and invests only a portion of his investment budget in a single trade or project, enhancing diversification and sound risk management practices.
Be informed and stay ahead of trends
Finally, it’s also important to stay ahead of the market and be informed about new trends, new opportunities, and new threats. Research and analysis are your best allies in your crypto investment journey, and at PlasBit, we emphasize the importance of thorough study before starting to invest in crypto projects. Only through rational and in-depth analysis and research can you make conscious and balanced decisions, allowing you to avoid being trapped in cognitive bias or echo chamber bubbles, typical of crypto influencer networks.
In conclusion, should I listen to crypto influencers? We highly recommend not following the advice of crypto influencers without assessing their reliability and the genuineness of their analysis. Most of the influencers are paid to promote projects, even if they are risky, unsafe, or, in the worst cases, scams. Always apply critical thinking and sound risk management practices to limit the risk of investing in scam projects and money loss. Prioritize DYOR (do your own research) and avoid projects that are too good to be true.
