Research Project
WHY DID I DO THIS RESEARCH?
I wanted to focus my research on Bitcoin with a particular focus on adoption rates rather than price discovery. This research was based on the final year of the last bear-to-bull cycle, 2020 - 2021, to better understand existing adoption rates. I’m more interested in Bitcoin adoption rather than price discovery because it is the adoption rate that signals the long-term sustainable value of Bitcoin and the blockchain technology it is built on. With this in mind, I’ve shared my executive summary below and will analyse existing adoption rates in the next newsletter to see what we can learn post April and November 2021 peaks.
Executive Summary
Research Purpose
The goal of this paper is to explore whether the mainstream media has an impact on the adoption of Bitcoin. There are 75 articles examined, published between March 2020 and April 2021, from three distinct news sources to achieve this. The analysis was both qualitative and quantitative, incorporating on-chain data. Another objective of this study is to investigate any relationship between Bitcoin adoption and its value.
Formula
The formula for calculating the influence score of each section is called the influence formula.
Positive (P) – Negative (N) = Influence score (I)
Total (T)
Neutral data coding is designated as “U” throughout the paper.
Literature review
The literature review covers the influence of media, including newspapers and social media, on Bitcoin. Additionally, it examines the narratives regarding Bitcoin and gold and the development of CBDCs.
Data Synopsis
This dataset comprises 75 newspaper articles from three different publications: the FT, the Guardian, and MailOnline. To enhance the qualitative data findings, four on-chain data points are included. These data points are total BTC addresses, new BTC addresses, BTC active addresses, and BTC transaction data. The research includes monthly, weekly, and daily data analysis for each of these on-chain data points.
Qualitative Synopsis
When analysing qualitative data, it's important to review all the coded information, including sentiment analysis for headlines, Bitcoin, institutional and retail adoption, and thematic analysis on crime, gold, regulation, and scarcity. Each section is given an influence score, which is quantified in the findings.
Findings
Bitcoin adoption is increasing, but price discovery is more volatile than adoption rates. The causation and correlation between Bitcoin adoption and mainstream media is uncertain.
Developing and applying the influence formula, the qualitative analysis points to the media influence on Bitcoin adoption as erring toward “U”. The average of the total influence scores = 0.16 and the median of the total influence scores is 0.35.
After conducting research, I found that the mainstream media has a negligible influence on the adoption of Bitcoin. Legacy media is well behind the curve and lags significantly behind the current Bitcoin adoption and price. In fact, I would strongly advise [not that this is financial advice] against investing in Bitcoin based solely on information from mainstream legacy media as it is very likely a waste of your time.
Moreover, it is important to be aware of the growing interest in Bitcoin during the period of 2024 - 2025. While some reports may be negative and others supportive, Bitcoin adoption is continuing to trend upward.