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Connecting Online Sentiment Towards the Cryptocurrency Industry with Global Market Capitalisation
Recently, BlockchainDefender released a report examining the impact of online sentiment on the cryptocurrency industry, including how it affects the industry’s global market capitalisation. The report takes advantage of BlockchainDefender’s experience of analysing online sentiment.
Online Sentiment Affects Market Capitalisation
The first study in the BlockchainDefender report confirms that online sentiment towards cryptocurrency impacts the industry’s market capitalisation. The report illustrates this connection via a graph with different lines for search volume, sentiment and market capitalisation. The three lines all move together, both in terms of increases and decreases. This correlation is most obvious in the rises of late 2017 and the dip from January to March 2018. The last several months of the graph shows all figures stabilising.
Differences in Online Sentiment by Country
The report looks at the online sentiment regarding cryptocurrency in Japan, the USA, Germany and the UAE. Of these, the USA has the most negative sentiment and Japan has the least. The report indicates that most negative online sentiment comes from cryptocurrency industry news websites, social media platforms, blogs, forums, crypto review websites, and crypto company directories and websites.
Online Sentiment for Specific Cryptocurrencies
BlockchainDefender also examines individual cryptocurrencies in the report. Looking at Bitcoin in the same four countries, the most positive results are in the UAE, followed by Germany, the USA, then Japan. The most negative results are in the USA, followed by Germany, the UAE and Japan.
From a global perspective, Iconomi is the cryptocurrency with the most positive online sentiment. Bitcoin Cash sits at the other end of the spectrum with the most negative online sentiment.
The report ends with a look at online sentiment for a specific yet unnamed cryptocurrency that faced a hacking attack and subsequent crisis in 2018. Following the crisis, positive online content decreased while negative online content increased. Interestingly, these changes were more significant in the West than in the East.
Online Sentiment Towards Traditional and Cryptocurrency Exchanges
BlockchainDefender also evaluates online sentiment towards cryptocurrency exchanges with the sentiment towards traditional exchanges that are well-established. The team analysed data in four countries regarding ten of each exchange type. The analysis indicates that Google search results have much more negativity for cryptocurrency exchanges than traditional exchanges.
The report indicates that a key influence in this disparity is the lack of ownership of online sentiment for cryptocurrency exchanges. While traditional exchanges have ownership of 34.88% of their search results, crypto exchanges only own 17.75% of their results. That leads to a reduction in control, which translates to more online negativity.
The BlockchainDefender crypto industry report is available to view or download online.
CoinDesk recently featured an editorial highlighting the growing counternarrative from banks trying to catch up to the cryptocurrency phenomenon.
Why the banks are scared
Those of us who have been interested in cryptocurrency for a while know the benefits of digital coins. There is increased safety, no central authority, more anonymity, and greater convenience. Banks and other financial institutions have largely been very skeptical of cryptocurrency. It’s obvious why they would be: cryptocurrency poses a threat to the status quo of the financial system. Banks are losing money every single time a Bitcoin transaction is made. Why? Because they could’ve been charging a transaction fee for that transfer. However, cryptocurrency as a concept is not going anywhere, which is why the banks are now trying to catch up.
The new counternarrative
The banks have now finally acknowledged the value of cryptocurrencies. Some have even reached the point where they want to launch their own coins and tokens. However, there is still a certain kind of arrogance emerging from their camp. They feel entitled to lead the way in cryptocurrency because the public supposedly has confidence in the banks. Part of the new counternarrative is that blockchain technology does not have all the solutions to financial challenges. The banks claim that they do much more to secure the confidence of the public.
Why they’re wrong
Bitcoin and other cryptocurrencies are making lives easier for people across the globe. It’s quick and easy to make a transaction. Merchants can easily accept payments without having to pay a single dime up front. More importantly, cryptocurrency removes the monopoly of money-creation from the central banks. That means banks are under great threat to their status in society.
In defense of central banks
With all that said, central banks still are the foundation that underpins the global financial market. Private banks are notorious for not trusting each other, and central banks are the mediators that make things run smoothly. Furthermore, central banks do have an important role to play in societies. Frauds and hacking attempts are constantly made on citizens, and the central banks are currently the thing keeping us safe from these risks.
Why there is a need for open cryptocurrencies in Africa
Not all nations are equally fortunate when it comes to their central banks. Countries like Zimbabwe, which has suffered from hyperinflation for years, stand only to gain from cryptocurrencies. The Reserve Bank of Zimbabwe (RBZ) engaged in quasi-fiscal activities a decade ago, which resulted in hyperinflation of a staggering 500 billion percent. Things have not improved significantly since 2008, and public trust in their central banks is at an all-time low. There is a need for open cryptocurrencies in countries like Zimbabwe, Zambia, Nigeria, and Mozambique. The availability of private cryptocurrencies will provide much-needed competition to the central banks. This kind of competition will, in turn, force them to improve and win back the public trust.
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