US TikTok Ban and Its Potential Impact on the Crypto Market

The social media platform TikTok is facing a potential ban in the US under the Protecting Americans From Foreign Adversary Controlled Applications Act, which is set to go into effect on January 19. The legislation would make it illegal for app stores and web-hosting services to distribute or service TikTok, citing national security concerns as its main reason for the ban.

TikTok’s Crypto Connection

TikTok has been involved with cryptocurrencies in the past, particularly with its virtual gifting system, which has raised concerns among regulatory bodies. In October 2024, the UK’s Financial Conduct Authority (FCA) expressed worries over the risks involved with unregulated crypto activities on the platform. However, this has not stopped TikTok from exploring the world of cryptocurrencies.

In December 2024, Sonic, a Solana-based gaming-focused layer-2 blockchain, chose TikTok as a platform to airdrop its SONIC token to all users onboarded through the social media app. The game, SonicX, gained over 2 million users through TikTok, demonstrating the platform’s potential in promoting cryptocurrencies to a younger audience.

Crypto Culture on TikTok

TikTok has been used by social media marketers to revive interest in cryptocurrencies, with its sizeable space for creating content that simplifies complex ideas in graspable forms that engage a younger tech-savvy audience. The viral #DogecoinTiktokChallange in 2020, where crypto influencers pumped up Dogecoin by 20% in a week, is a notable example of TikTok’s potential in promoting cryptocurrencies.

Potential Impact on the Crypto Market

According to Alejandro Zambrano, Chief Market Strategist at ThinkMarkets, a global online brokerage firm, a TikTok ban in the US is “unlikely to affect the crypto market.” Zambrano stated that TikTok has been suppressing crypto-related content for years, rendering its closure largely irrelevant to the industry.

TikTok has been suppressing crypto-related content for years, rendering its closure largely irrelevant to the industry. For instance, major crypto influencers on X previously experimented with TikTok but garnered limited views, leading them to stop posting on the platform. Moreover, the top TikTok accounts today attract significantly fewer views for similar content compared to leading influencers on X.

Zambrano’s statement is backed by the fact that TikTok amended its content policy in July 2021 to prohibit financial services and products, including cryptocurrencies, in a bid to take a firm stand against misleading advice and high-risk investment schemes. In light of this content ban, it is less likely to have a major impact on the crypto sector if TikTok were to be completely banned in the US.

Key Takeaways:

  • TikTok’s potential ban in the US is unlikely to affect the crypto market, according to Alejandro Zambrano, Chief Market Strategist at ThinkMarkets.
  • TikTok has been involved with cryptocurrencies in the past, particularly with its virtual gifting system.
  • The platform has been used by social media marketers to revive interest in cryptocurrencies.
  • TikTok’s content policy has prohibited financial services and products, including cryptocurrencies, since July 2021.

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