bitcoin

Bitcoin: What’s the word?

In Cyber Security, Digital News, General News, Investment News, Thought Leadership by Quincy SimargoolLeave a Comment

If Bitcoin’s incredibly fickle nature wasn’t already common knowledge, the tail-end of 2017 and the start of 2018 was a harsh lesson for new crypto investors attempting to capitalise on the hype. Reaching a peak valuation of $19,343 on the 16th of December before falling drastically to $6,914 by the 5th of February, the highs & lows of Bitcoin and all the attributed risk was witnessed in the space of 8 weeks.

Despite the high level of risk involved in Bitcoin investment, the overarching picture would suggest strong increasing demand for the cryptocurrency. Even at the base of the Bitcoin’s trough in February, it was worth 22X its value at the beginning of 2015 ($313).

This demand increase would suggest optimism towards Bitcoin, even if this optimism were simply the belief in the capability to make a quick gain as opposed to its viability as an actual currency.

The online pariah?

However, analysis of social media conversation provides a contrasting view.

Since 2015, overall sentiment towards Bitcoin has become increasingly bleak, with positive sentiment dropping year on year, and negative sentiment increasing. Conversations on Bitcoin are often reactions to its price fluctuation and speculation on the cryptocurrency’s future.

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For an entity that has seen such a large increase in demand over recent years, it is intriguing to see an inverse relationship between the valuations of Bitcoin versus the overall sentiment towards it. While sentiment is likely to be just one factor in determining Bitcoin price, it would appear on the surface that there is a vacuum for this increasing negativity.

 

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Looking at the origination of the social media conversations, people over the age of 35 conducted the majority of conversations (77%), with only 24% coming from the younger demographics. This would suggest that the older generations are engaging the most with Bitcoin online. However, this contrasts with the profile of people visiting Bitcoin exchanges and websites.

Looking at Bitcoin websites and exchanges, these sites attract a far younger demographic with 25-34 year olds making up a 30% of visits, while people over 35 made up the highest proportion of visitors with 42% of visits.

Comparing the two data sets shows that, while it is the older demographics who’s talking about Bitcoin, the demographic actually visiting and trading on these sites is younger. It would appear that, while under 24-year-olds and 25-34 year olds are relatively quiet on social media, they generate 58% of the online traffic for Bitcoin sites.

While it certainly seems that younger populations are driving online demand, it is unlikely that they are wholly driving the upward price trend. Aptly named “whales” are capable of causing great changes in price – however, it’s improbable that the younger age ranges fall within this category due to limited capital. Yet their online presence still likely to play a valuable role in Bitcoin demand and valuation.

“Bitcoin? It’ll never catch on!”

With younger demographics driving demand for Bitcoin despite increasing negativity from older generations, this conjures up the stereotypical image of a cynical elderly and their scepticism towards modern inventions. (“Gravity? An absurd idea! An umbrella? What an unnecessary contraption! BetaMax? It will never catch on!”) While Bitcoin is viewed with caution and its future role may seem uncertain, it is clear that the younger generations show belief in the cryptocurrency despite this.

It has been said that kids never listen. And perhaps for Bitcoin, this certainly seems the case.

Quincy Simargool is an Analyst. To find out more about how onefourzero’s data analysis and insights can help you identify opportunities for growth and potential risks, click here or contact fleur@onefourzerogroup.com

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