The Role of Twitter in Cryptocurrency Pump-and-Dumps

This research paper investigates the influence of Twitter promotion on cryptocurrency pump-and-dump events. It examines how abnormal returns, trading volume, and tweet activity interact during these events. The study reveals that Twitter effectively attracts attention to pump-and-dump schemes, resulting in significant abnormal returns prior to the event. Investors who rely on Twitter for information tend to exhibit delayed selling behavior during the post-dump phase, leading to substantial losses compared to other participants. The paper employs a comprehensive methodology, including graphical analysis and regression modeling, to analyze the relationship between Twitter activity and market dynamics. It also discusses the emergence of pump-and-dump schemes in the cryptocurrency market, highlighting the role of social media in facilitating market manipulation. The findings contribute to understanding participant behavior and the impact of social media on market integrity. The paper is structured into sections detailing the methodology, empirical results, and a conclusion summarizing the key insights.