BlockchainDefender is strongly interested in the trust that people have for cryptocurrency and blockchain projects. The company has released a report examining how a lack of trust affects the global market capitalisation of the cryptocurrency industry. Much of the research within the report relies on Google AdWords data, which BlockchainDefender has used to determine each project or brand’s reputation. The report explores the link between trust and the market capitalisation of the crypto industry and includes multiple countries, exchanges, cryptocurrencies and case studies. The result is well-rounded, delivering insights into the relationship between global market capitalisation and reputation.
Increased Market Capitalisation and Positive Sentiment
The first section of the BlockchainDefender report explores the relationship between market capitalisation and online sentiment. BlockchainDefender was not surprised to see a positive correlation between the reputation of the crypto industry (or a specific cryptocurrency) and global market capitalisation. The report demonstrates this correlation during both lows and highs. An example of a low would be the period between January and March 2018, when market capitalisation dropped and negative sentiment rose. Other periods showcased in the report present the opposite to be true.
Crypto Exchanges Have Less Reputation Control than Traditional Ones
The BlockchainDefender report also explores how much control cryptocurrency exchanges have over their reputations, specifically in comparison to traditional exchanges. It shows that traditional exchanges typically have more solid reputations and better control over them. The report finds that more than a third of the content online related to various traditional exchanges is officially owned by the exchange. This content ownership boosts both management and reputation. Crypto exchanges are newer than traditional ones, which leads to a lesser degree of control. The report attributes this to the smaller percentage of overall content that crypto exchanges control.
The report also analyses sources of negative sentiment. When talking about negative sentiment regarding traditional exchanges, 51% comes from review sites. Only 20% of negative sentiment regarding crypto exchanges is from reviews; crypto exchanges face negative sentiment from more sources than traditional exchanges.
A Crisis Drops Crypto Sentiment and Value
The final portion of the BlockchainDefender report looks at a crisis involving a cryptocurrency. Both the price of the cryptocurrency in question and the online sentiment dropped following a hack. The specific crisis that the report examines resulted in a loss of $55.5 million in market capitalisation.
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