Is Cryptocurrency Just Another Fake News Item?

From Twitter hacks to scandalous reports, there’s no shortage of activities taking place online surrounding cryptos

This article was written by Charlotte Day, Creative Director at Contentworks.

Fake news has become one of the buzzwords of 2017. Misleading headlines, nonsense articles and made-up figures have become part of our very existence with the finance industry constantly trying to bat away stories that could directly influence the market. So how do we know what’s real or not?

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Cryptocurrencies and fake news

Being somewhat of a complex and misunderstood concept, cryptocurrencies like Bitcoin often fall victim to false news bandits who strive to unsettle the world of digital trading.

From fake valuations to Twitter hacks and scandalous reports, there’s no shortage of malicious activities taking place online making it all the more important to stay on the ball with regards to the latest cryptocurrency information. Here are some examples of recent fake news:

Ethereum founder killed in a car crash

Ethereum – a cryptocurrency and payment system like Bitcoin – was greatly affected by fake news earlier this year. When news spread online that the founder had been killed in a car crash, $4 billion was wiped off Ethereium’s total market value just like that showing how radical and detrimental to business fake news can be.

Vitalik Buterin with the founders of The Floor

Rumor that Amazon will accept Bitcoin

Not so long ago, rumor that Amazon will accept Bitcoin set the Internet alight. People were convinced that the digital currency was soon to be given a credible boost, but this was all down to a misinterpreted newsletter with a striking lack of evidence. While Amazon may indeed accept Bitcoin in the future they’ve never released an official statement confirming this information.

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So as you can see, fake news can totally disrupt the cryptocurrency trading industry. It can send the markets up and down keeping traders on their toes. Looking on the positive side, crypto is at least gaining exposure and is certainly not the only victim of fake reports.

How to source the facts from the myths

With so much online content being shared by popular networking sites like social media, it’s easy to get the wrong end of the stick and make presumptions that aren’t true. While networking platforms and official bodies such as the US Securities and Exchange Commission are cracking down on so-called ‘fake news’ and trying to protect the finance industry, it’s important for finance – notably FX writers – to source the facts from the myths. Here’s how:

  • Be aware of fake news and don’t take anything at face value
  • Don’t believe everything you read on social media
  • Don’t jump on the bandwagon or follow hype unnecessarily
  • Double check all sources, cross reference and confirm the origin of quotes and articles
  • Analyze posts from news outlets and reputable industry leaders to gauge market sentiment
  • Keep an open mind to avoid misreporting facts. Research without bias or agenda.
  • Ask yourself why a story has been written? Is there an underlying purpose?

Pause for thought

It has been reported that banks are trying to restore the normal status quo of economics and are therefore pedaling fake news regarding cryptocurrencies to derail this digital currency. With investors, governments and businesses showing interest in digital currencies it’s important to watch out for sources that may resist and resent such change.

Still getting it wrong? What you need to know

Many writers still source the wrong information. To avoid this you should know that:

  • Fake news often looks like and is formatted the same as regular news
  • Many writers use pseudonyms such as Equity Options Guru, The Swiss Trader, Trading Maven and Wonderful Wizard to hype stocks
  • Analysis presented as impartial is often paid for
  • Articles on investment research websites may not be objective and independent

The importance of compliance 

Being aware of fake news and taking care when sourcing information is one thing. Compliance is another. Even if you’ve access to information that’s true and correct, you still can’t write whatever you want or you run the risk of generating ‘fake news’ yourself without intending to.

If all brokers offering cryptocurrencies claim to have the fastest platforms and the tightest spreads, these statements become meaningless. They’re also overly promotional and will likely break the compliance rules set by regulatory bodies like CySEC, the FCS and FSA. With the new MiFID II regulations clamping down on trading, keeping a close eye on content is crucial, it’s also essential to:

  • Disclose all facts
  • Not make promises
  • Be transparent and not misleading
  • Not try to sway people in their trading decisions
  • Provide reasonable and balanced information
  • Give the pros and cons of particular scenarios

To conclude, cryptocurrency is not a fake news concept but it has been the focus of many untrue reports, which have had a knock-on effect. Anyone involved with the industry therefore needs to be aware of such falsities and do all they cannot to be fooled.

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