Over the past few weeks, the hype about Bitcoin has reached fever pitch, as the cryptocurrency’s rise in price accelerated and the Dollar value of one Bitcoin crossed $10,000 (two weeks later, it’s at over $12,000). Considering you could buy one Bitcoin for $200 in 2015, this is pretty impressive.
But how can we explain this rise? And is it just mania?
A great article in The Atlantic talked about how all currencies are a consensual decision – from a bag of beads to modern banknotes, if a large enough group of people decide something is a currency, then it becomes one.
This is one way to explain the phenomenal rise in value of Bitcoin – from news reports on Russian bots influencing the 2016 election to people noticing how Facebook tracks your behaviour to sell you ads, the average person in the street now knows far more about digital technology than they did in 2009, when Bitcoin was launched. When this is coupled with a popular distrust of banks, it’s easy to see how Bitcoin gains its intrinsic value.
So if the value of Bitcoin is dependent on what large groups of people think about cryptocurrency in general, then understanding what large groups of people are reading about Bitcoin is important because the media coverage of Bitcoin informs buying decisions.. Last month, our News API gathered, analyzed, and indexed 2.6 million news stories as they were published. In this blog, we’re going to look into these stories to see what the media we saying about Bitcoin in November.
We’re going to look at three things:
- What is the scale of this hype and how is it accelerating?
- What concepts do the media talk about in stories about Bitcoin, and have the popular concepts changed since the hype has grown?
- Has the media started to express more positive, negative, or neutral sentiment about Bitcoin since its price shot up?
How big is the hype?
First of all, we need to quantify all of this media attention to see how big the hype actually is by finding exactly how many stories were published about Bitcoin last month and how this compares to previous months.
You can also see that over November, the media interest in Bitcoin increased as the cryptocurrency’s value grew (despite a dip over the Thanksgiving weekend), with this interest peaking on the first day that the value of Bitcoin hit the 10,000-dollar mark. So we can see the media hype was focused on Bitcoin crossing the $10,000 milestone, rather than any definite indicators of rising value in the future.
What else are the media talking about when they talk about Bitcoin?
Knowing the scale of hype about Bitcoin is useful, but knowing what was being talked about in these almost 14,000 stories would let us look even deeper into the Bitcoin saga. When our News API indexes a story, it analyzes and stores dozens of data points, one of which is a list of all other concepts mentioned in the story. Having access to this list for every one of the millions of stories our News API gathers every month gives us a really useful dataset to query.
So we decided to analyze this in two periods – June and November. This will allow us to see if the media has started talking about other subjects since the hype really started taking off in the Autumn.
To analyze this, we used the Trends endpoint to return the most-mentioned concepts in stories with “Bitcoin” in the title. Take a look below and see what else was mentioned.
You can see that the descriptive concepts are the most popular – Ethereum, blockchain, and Coinbase all put Bitcoin in context, and these are all concepts that would be mentioned when talking about Bitcoin in general. This would be very useful if we were looking for related stories, but for our analysis we need to look past these most-mentioned concepts and pay attention to what else was talked about.
Importantly, Japan is mentioned prominently, prompted by the country’s largest Forex market opening up to Bitcoin trading.
In contrast with this, looking at the results of the same search in November’s stories, we can see new concepts being mentioned.
Jamie Dimon and CME Group are two of the most-mentioned concepts here, resulting from JP Morgan Chase’s decision to start offering trades on Bitcoin futures (from CME), despite their CEO (Dimon) publicly declaring only six weeks earlier that he’d fire anyone “stupid enough” to deal in the cryptocurrency.
Remember that November’s story volume is 500% greater than June’s. If November’s story volume was driven by US-based traders beginning to deal in Bitcoin, while June’s story volume included Japanese traders’ much earlier adoption of the cryptocurrency, this gives us a hint that perhaps a lot of the hype around Bitcoin is focused on the news of a few well known financial institutions, which interestingly enough are all based in the US.
What was the sentiment of the coverage?
So we know the volume of the Bitcoin coverage and what was being talked about, but knowing whether all of this coverage was positive, negative, or neutral would let us understand the sentiment shown toward this hype.
Our News API analyzes the sentiment of every story it gathers, so using the Time Series Endpoint again, we can analyze the sentiment of stories with “Bitcoin” in the title over the past few months.
You can see that the sentiment split is roughly the same since June except for in August, when the coverage became more favourable, and in September, when it became more negative. This spike in negative coverage was likely caused by Jamie Dimon’s public remarks about the cryptocurrency being a fraud.
Interestingly, you can see the coverage gets much more positive in November, when the coverage exploded.
If you want to analyze the coverage of Bitcoin in greater detail than our brief layman’s overview here, you can start making queries to our News API in minutes, even without writing a line of code. Sign up for a two-week trial free of charge, with no card details required by clicking on the image below.