The same kind of crypto scams plaguing Twitter are catching on on Instagram as well. There are more than 1,3 million Instagram posts using #Coinbase, most of which prove to be inauthentic. Coinbase commented briefly, saying, “We currently don't have an active influencer campaign,” without specifically naming Instagram.
In recent months, it appears that Instagram fraud and scams, a growing trend due to media exploitation of the COVID-19 pandemic, are outpacing current moderation practices.
At the same time, there are many authentic influencer accounts campaigning and giving-away on Instagram as part of their marketing strategies around the time of COVID-19. Despite this climate, Instagram still provides an important networking platform for the cryptocurrency industry.
The case of Brazil
Once again, a crypto company operating in Brazil, the Novadax exchange backed by the Abakus Group, shows how startups are leveraging Instagram for customer relationships during COVID-19.
Chinese investor-turned-CEO of Novadax Beibei Liu said thousands of Brazilians have used his exchange to buy bitcoin for the first time in recent months. He claims that out of around 150.000 total user accounts, polls indicated that 20% were new to the world of cryptocurrencies.
“We do a lot of basic educational content on Instagram,” Liu said, including Instagram Live sessions to nurture a direct relationship with customers and answer user questions. “Instagram is a very important channel in Brazil, which has a large and rather young population”.
More than half of the exchange's Brazilian users only use mobile devices, Liu said, so mobile-optimized customer support options are key.
Instagram to earn user trust
Even for the minority of professional traders using the platform, such as Portuguese-speaking ones in Europe or the United States, Instagram marketing helps the startup earn user trust.
“They are more skeptical, they have concerns. So we publish a lot of content related to the background of our company and the background of the team, ”Liu said in reference to how the startup uses Instagram for relationships with clients and experienced traders.
Indeed, the company is officially opening support for European traders this month, after a long period of limited onboarding, to help increase liquidity and create a complementary flow between institutions and the emerging retail market.
This is why authenticity on social media platforms like Instagram, which is so difficult for moderators to safeguard, is a key factor influencing cryptocurrency adoption patterns.
In regards to the global dynamics of the crypto community on Instagram, where some users have a hard time identifying authentic accounts, both influencers and users are hoping that Instagram can create a new, more active and effective model to protect their users.
