Bots Encouraged Buying of GameStop, Dogecoin in Meme Trading Craze: Report
The buying frenzy that sparked a rush into GameStop (GME) and dogecoin recently was likely amplified by trading bots, according to analysis from a Massachusetts-based cybersecurity company.
As reported by Reuters on Saturday, PiiQ Media says it found patterns in posts and keywords posted to social media platforms during set times each day suggesting bots were driving the craze. It also compared such posts to unrelated stocks for comparison.
However, the company is uncertain how much impact the bots may have played in driving trading.
Based on its analysis, the company says foreign actors may have helped stir up the craze in buying of GME and other “meme stocks” when Reddit groups united to drive prices higher and “short squeeze” large hedge funds.
That’s despite Reddit’s CEO Steve Huffman’s comments to a U.S. congressional committee in February in which he denied bots or fake accounts had played a “significant role” in message traffic on the GameStop subreddit, r/GameStop.
In its analysis of posts on Twitter, Facebook, Instagram and Youtube, PiiQ’s analysis examined patterns of keywords such as “Hold the Line” and “GME” in conversations between Jan. 28 and Feb. 18.
The analysis shows regular frequent posting at set times during the trading day, according to the report.
“We saw clear patterns of artificial behavior across the other four social media platforms,” said PiiQ CTO Aaron Barr in the report. “When you think of organic content, it’s variable in the day, variable day to day. It doesn’t have the exact same pattern every day for a month.”
The cybersecurity company believes there are currently tens of thousands of bot accounts hyping GME, other meme stocks and DOGE.
While the company did not analyze data from Reddit posts, Barr said a similar pattern of of bot activity manipulating trader conversations on the social media platform was likely.
Twitter, Facebook, Youtube, Instagram and Reddit did not reply to CoinDesk’s request for comment by press time.