Understanding of cryptocurrencies and Bitcoin by the general public.
Media communication about cryptocurrency
An important consideration in the interplay of social factors affecting the cryptocurrency market is the effects of media on public opinion. Within mass media communication, newspapers, radio, television, and now web and mobile phone technologies, are all means to convey information to the public. Mass communication agenda-setting and framing theories focus on the media’s ability to tell the public what to think about and how to think about salient issues perhaps also what to do about them. Tsvetkova, Yasserri, et al. examined human-machine relationships interacting with prediction markets and determined that information and trust are key factors impacting market capitalization and user confidence in these exchanges
In the various literature reviewed, we identified a set of social factors that we believe to have a role in the price fluctuations of cryptocurrencies. These factors were shortlisted based on the prior knowledge obtained from previous research work and analysis of important events in the cryptocurrency market which were recorded over a period of six months. Finally to verify the role of these factors we collected the needed data from various Internet sources such as news and discussed in detail in the following section The markings were then discussed and concluded by the authors.
• Correlation analysis has been done to find the important attributes which have a higher correlation with the rising or fall of the cryptocurrency market. The authors opted for the Weka machine learning tool.
- Various studies have shown that the media is the most important source of influence on the price of Bitcoin and other cryptocurrencies. Greater media coverage leads to a better understanding of cryptocurrencies and Bitcoin by the general public. This can potentially attract new people to cryptocurrencies.
- Positive media coverage of Bitcoin will generally lead to higher prices, while negative price coverage will have the opposite effect on cryptocurrency prices.
- It is also important not to overlook the mass effect caused by certain news in the media. Investor crypto who has discovered certain information in the media will be quick to talk to his peers who will do the same. With the power of social networks, the news will spread like wildfire and the price of Bitcoin will be impacted.
- Let’s take the simple example of a large company that is well known in the world of traditional finance and that would declare a very strong interest in the Ripple system and would like to test it in real conditions in the near future. This simple declaration of intent will cause a sharp increase in the price of its token, Indeed, by reading this statement, many investors will consider that Ripple is legitimized since a major player proclaims its intention to support it. This will encourage them to invest in his token.
Just as financial markets have ups and downs, Bitcoin and cryptocurrencies also have ups and downs. Due to the novelty of the Blockchain and Bitcoin, these cycles of increase or decrease are much stronger. It is therefore good to be as well informed as possible and to know the factors that influence the price of Bitcoin in order to be able to react as well as possible or even anticipate in an ideal way.
It is likely that as the Bitcoin and the cryptocurrency market as a whole mature, this high volatility tends to disappear, thus limiting the risk.