BlockchainDefender’s recent report explores how global market capitalisation of cryptocurrencies and the crypto industry is affected by reputation and online sentiment. The report includes several different studies, each with a slightly different focus; though all topics are closely related to the central theme of online sentiment.
The Impact of a Crisis on Coin Price and Market Capitalisation
The report from BlockchainDefender ends with a case study exploring an unnamed cryptocurrency that underwent a crisis in 2018. The report examines how the crisis impacted the online sentiment of the cryptocurrency in question, as well as its coin price and market capitalisation.
Prior to the crisis, the cryptocurrency in question had an online reputation that was better than many of the others in the industry. Only 1.3% of the content about it in the UK, US, UAE, Germany, and Japan was negative; the content was mostly neutral (37.5%) or from official sources (34.2%).
Immediately after the crisis, the sentiment surrounding this cryptocurrency changed dramatically. Third-party positive content dropped from 16.4% to 2.4%, while negative content increased from 1.3% to 23.4%. The price of the cryptocurrency was also affected by the crisis, dropping by $1.15 while the market cap dropped $55.5 million.
While these results are unsurprising, the company also outlines some interesting analysis most people would otherwise be unaware of. When comparing Western countries with Eastern countries, the West saw a much greater swing in negative sentiment regarding the cryptocurrency. In fact, even after the crisis, 52.9% of online sentiment in Japan was neutral, as was 72% in the UAE. In comparison, the UK had 40.65% negative sentiment, and the US had 47.55% negative sentiment.
Furthermore, the BlockchainDefender report compares sources of this negative sentiment following the crisis. 20% of negative sites were crypto market news, with 5% mainstream news and 3% forums. Based on BlockchainDefender’s research, it is possible that the higher negative content regarding the cryptocurrency could have deterred as many as 65,000 potential engagements.
Other Findings Related to Trust
The above-outlined case study is just a single element of the full report. The research also demonstrates the way that greater search volumes and positive online sentiment translate into higher market capitalisation for cryptocurrencies. It also outlines the challenges cryptocurrency exchanges face compared to traditional exchanges when it comes to online sentiment and reputation management.
The report from BlockchainDefender is certainly worth a deeper look for anyone interested in the cryptocurrency industry’s reputation and its impact on market capitalisation.
You can also download the report. Press the button to proceed.