A recent report from BlockchainDefender examines the connection between the market capitalisation of the cryptocurrency industry and its online sentiment. The report relies on the experience of BlockchainDefender to analyse trends related to online reputation. It details overall trends, variations by cryptocurrency and region, the impact of a crisis, and comparisons with traditional financial exchanges.
The Impact of a Crisis
One section of the BlockchainDefender report examines how a crisis impacts the reputation of a cryptocurrency as well as its market capitalisation and price. Researchers looked at the impact of the crisis in the US, the UK, Germany, the UAE and Japan. Prior to the crisis, only 1.3% of content published in those five countries was negative, while positive content was 16.4%, higher than the industry average. Following the crisis, negative sentiment increased to 23.4% (an increase of 22.1%) while positive content dropped to 2.4% (a 14% drop).
Interestingly, BlockchainDefender also discovered a difference between countries in the West and East, with the West featuring much more negative sentiment. Negative content after the crisis was 40.65% and 47.55% in the UK and US, respectively. By contrast, it remained at comparatively low values of 14.3% and 5.25% in Japan and the UAE, respectively. Neutral content was also significantly higher in the East (52.9% and 72% in Japan and the UAE, respectively) than in the West (28.4% and 21.2% in the UK and US, respectively).
BlockchainDefender took the impact of a crisis a step further and explored the sources of the negativity too. 20% of negative sites were crypto market news, with 5% mainstream news and 3%forums. Following the crisis, the price of the crypto in question dropped from $3.20 to $2.05, and the market capitalisation dropped from $160.3 million to $104.7 million.
Other Findings from the Report
In addition to the results regarding the impact of a crisis on a cryptocurrency, the BlockchainDefender report confirmed that a lack of trust in crypto correlates positively with decreased market capitalisation. Of the previously mentioned countries (excluding the UK), crypto has the worst reputation in the US based on the proportion of negative online content.
You can also view the leaderboards for sentiment towards cryptocurrencies around the world in terms of the best and worst performers. Iconomi has the most positive content, while Bitcoin Cash has the most negative content.
Another section of the study reveals that traditional exchanges have stronger online reputations and more control over those reputations than crypto exchanges.