Bitcoin, the cryptocurrency, which a few years back was known only to computer geeks, libertarians and futurists is now a part of mainstream conversation. Positive bitcoin news is hotly anticipated. With a 20-fold increase in 2016/17, the dizzy rise of Bitcoin has many people wanting a piece of the action. Unfortunately, this frenzy also causes the coming together of the naive novice investors and the sharks who want to prey on them.
With a large number of early bitcoin believers still holding on to cache, it is the speculators who are running the show currently. Some unscrupulous speculators seek to manipulate the price by spreading fake bitcoin news. Reactions to fake bitcoin news can cause fluctuations and big volatility, which is sufficient for speculators to make a quick buck.
As a bitcoin investor, you should be savvy enough to differentiate fake bitcoin news from the real deal.
Here are 5 telltale-warning signs of fake bitcoin news:
It appears on Facebook
Facebook is a favourite hunting ground of those who spread fake bitcoin news. It has been successfully used for manipulating public opinion for elections or news about the financial markets. If you see bitcoin-related news on Facebook from a news outlet that you have never heard of before, it is most likely fake.
It comes from unverified social media accounts
One of the major ways to cause short-term spikes in the price of bitcoin is by creating a false endorsement by an influential figure. Before acting on any tweets by a public figure, check if the account is verified (check for the blue tick).
It is anecdotal
One of the easiest ways to spread the fake bitcoin news is through messenger services. These include services like Telegram or bulletin boards like Reddit or 4chan. If the source of news is someone’s brother, friend, or neighbour who is a supposed insider, it is in all likelihood, a hoax.
It appears on pages mimicking respectable news sources
Fake news items can appear on cleverly crafted fake pages. These fake pages mimic the web pages of established media sources and have a URL that is similar to the real thing. Always look at the URL carefully before trusting the news.
It seems too good to be true
The biggest warning sign is also the most obvious. If the reported news represents a dramatic change such as a big departure from previous policy, it is always wise to verify it.
Whilst there is uncertainty about the future direction of bitcoin, price movements will largely be based on news, both real and fake. As a clearer picture emerges, the volatility in bitcoin will decrease and it will become more stably priced. However, until that time it is essential for investors to take every piece of news with a pinch of salt. That is at least until it is verified as true.