With the growing importance of the cryptocurrency market, BlockchainDefender chose to conduct an analysis of the relationship between online sentiment and market capitalisation. The report relies heavily on research conducted using Google AdWords to evaluate search terms. It compares the quantities of negative sentiment in online searches and content to those of positive content and draws out further analysis.
Report Goals
For convenience, BlockchainDefender divided its report into three studies, each with its own goal or set of goals. The first study examines the impact of online sentiment on a cryptocurrency’s market capitalisation. Additionally, it pinpoints which established digital currencies have the worst and best online reputations, any variations in sentiment related to cryptocurrencies by region, and the most common sources of negative sentiment.
The other studies explore how the online reputation of cryptocurrency exchanges differs to that of traditional exchanges, and how a cryptocurrency’s price is affected by a crisis.
The First Study
Unsurprisingly, the first study in the BlockchainDefender report indicates that when cryptocurrencies experience an increase in search volume and positive online sentiment, market capitalisation increase. However, when online sentiment is negative, market capitalisation decreases.
The United States has the largest proportion of negative content related to cryptocurrencies out of the four countries analysed, followed by Germany, the UAE and Japan.
For Bitcoin, the UAE has the most positive search results while the US has the most negative search results. When comparing reputations of various digital currencies, Bitcoin Cash has the largest proportion of negative sentiment while Iconomi has the most positive sentiment.
The Second Study
Due to their longevity, traditional exchanges have more control over their online reputations. BlockchainDefender found that 34.38% of online content regarding traditional exchanges is owned by that exchange. By comparison, only 17.75% of online content related to crypto exchanges is owned by the exchange in question.
Traditional exchanges follow the typical market trend for sources of negative content, with 51% coming from reviews. This figure drops to just 20% for crypto exchanges, with the crypto market accounting for another 24% of negative sentiment.
BlockchainDefender notes that the rapid growth of cryptocurrency has led to increased scrutiny, which increases the sources of negative content to include blogs and social media.
The Third Study
The final study saw a drop in both market capitalisation and price of a cryptocurrency following a crisis in 2018. This crisis was due to hacking. The most interesting finding in this section of the report is that the cryptocurrency’s online reputation remained mostly neutral in the East but turned negative in the West.
View the BlockchainDefender crypto industry report on SlideShare or download a copy of the digital eBook.
How a Lack of Trust Affects the Global Market Capitalisation of the Cryptocurrency Industry from BlockchainDefender
Comments
Log in or sign up to join the conversation.