For a while there, as bitcoin flirted with $20k, it seemed like everyone and their mother were talking about crypto. We were listening to the social media conversation as hype built, peaked, and then waned. Here’s what we learned.
As the aggregate value of all cryptocurrencies hovers around $300 billion (following highs upwards of $500 billion earlier in the year), we find ourselves operating in a world in which our economy is facing a new reality. Or is it? Uncertainty abounds. Some are convinced that cryptocurrency is the next great disruptive technology. Others warn that the bubble’s about to pop for good. What’s clear is that cryptocurrency, particularly Bitcoin, has entered the consciousness of the mainstream.
But how to understand mainstream attitudes toward crypto? Examining the usual signals — price data, trading volume, market capitalization, hash rate on the Bitcoin network, etc.— gives us insight into the small sliver of the population who are innovators or early adopters in the crypto game. To understand public attitudes & awareness more broadly, we need to take a different approach: analyzing recent social media conversation and audience data.
The social data report that follows covers 4 main sections:
- Decoding the rise of crypto buzz
- Who’s driving the conversation?
- Tracking adoption & interest conversation
- Analyzing chatter about motivations & barriers
But first, a bit on methodology
Are everyday people actually talking about cryptocurrency?
This study explores discussion across social media channels, totaling nearly 5 million mentions. The main dataset used includes US-only, English conversation data spanning September 14, 2017 — February 16, 2018. All conversation data represented within was collected and analyzed using Pulsar, an audience intelligence platform. In select areas of the report, social media conversation data from Pulsar is supplemented with information from other sources, including Audiense, Google search data, and interpretations of secondary research.
1. Decoding the rise of crypto buzz
As prices rise and fall dramatically, what do conversation trends reveal about cryptocurrency interest?
Patterns in social media conversation signal upcoming Bitcoin price movements
We examined the shape and scale of cryptocurrency conversation, alongside search and price data, to understand the relationship between social buzz and cryptocurrency demand. Each of these data streams offers signals about interest in cryptocurrency. Our findings from a side-by-side analysis support the hypothesis that digital engagement around cryptocurrency has a measurable impact on perception and behavior (investment).
One might assume that online cryptocurrency conversation is mostly reactionary, trailing prominent media buzz — but social conversation actually seems to stimulate interest and action in the space. Spikes in conversation volume often precede spikes in search volume by one full day, and new price highs for Bitcoin by one to three days. In nearly every case, a rise of 10% or more in social cryptocurrency buzz volume from one day to the next forecasts a rise of at least 5% in the price of Bitcoin within three days’ time.
Over the full period measured, higher social conversation volumes were strongly correlated with higher Bitcoin price levels (r = .60). However, this relationship has weakened in recent weeks as Bitcoin comes off its December highs. In the run up to Bitcoin’s $10k milestone, and eventual $19k peak, correlations ran as high as r = .81. On the way up, buzz pushed the price higher, which provoked more buzz. We’re now starting to see divergence between price movements, search activity, and social behavior, suggesting a move into a more fragmented, and perhaps more nuanced, mainstream conversation about the future of Bitcoin.
Relative to other markets, crypto is ‘always-on’
Unlike capital and commodities markets, cryptocurrency trading never pauses, capturing investor and observer headspace well outside of working and banking hours. This is reflected in social conversation as well. In fact, crypto buzz consistently spikes late into the evenings toward the end of each week, with peak volumes even carrying into the weekend. You might say crypto is the currency that never sleeps.
Bitcoin is clearly still the brand name carrying the cryptocurrency market forward
Mentions of Bitcoin outpace not only generic mentions of the category (cryptocurrency, digital currency, etc.), but also the aggregate total of these category mentions plus the next top ten cryptocurrencies combined. Bitcoin’s prominence in the zeitgeist reinforces the idea that consumers like having a brand name to latch onto, as brands symbolize certain values (freedom, innovation) and help simplify choices in complex markets (What new tech should I consider? Where should I invest my money?).
Contextualizing the rise of Bitcoin and cryptocurrency interest against broader financial market interest provides a striking view: over the last six months, crypto conversation has trended higher than conversation around the economy and the stock market (“stock market,” “stocks,” “dow,” “#DJIA,” etc.). Interestingly, we also see generic mentions of cryptocurrency gaining ground on Bitcoin, as over time the rising tide of Bitcoin seems to lift all boats.
2. Who is driving the conversation?
Profiling the mainstream cryptocurrency audience
In addition to analysis of the social conversation itself, we isolated data about users participating in the conversation in order to build demographic- and affinity- profiles of the audience.
Crypto buzz is driven by a diverse audience beyond the young, male, tech community
When we think of who the Bitcoin investor or enthusiast is, a Silicon Valley stereotype might come to mind. But examining the online audience, relative to social media platform user benchmarks, cryptocurrency discussion is well distributed across age segments and other demographics.
While the social audience is majority male, women are well- represented — over 425K women have posted about cryptocurrency in the last five months.
Throughout our study we’ve seen some notable shifts in volume around what people talk about, but the who — the demographic distribution of the audience — holds quite consistent. One of the only visible changes is a very slight decrease in the share of women in the audience; women were more vocal toward the end of 2017, as the price of Bitcoin was sharply ascending to $19K.
Analysis of political affinities shows a social audience that leans liberal. This indicates that the libertarian and progressive values common among the core crypto community are likely reflected in the mainstream audience.
Top cities among the audience tend to be major tech-driven business markets, and smaller startup hubs, with few outliers
Compared to other demographic data points, regional diversity within the American crypto audience is limited. Most cities that over-index for Bitcoin conversation are coastal business centers, or smaller, tech-forward cities such as Denver and Austin. Perhaps the most interesting outlier is the Detroit audience, which proportionally plays a much bigger role in cryptocurrency conversation than it does in social media conversation generally.
One theory is that the city’s turbulent economic history may play a role here, pushing a relatively high portion of the population toward a crypto mentality — one where the people are less reliant on banking trust, government bailouts, etc.
There are 5 main persona segments within the crypto audience, led by ‘Pop Culture Techies’, a group that resembles the mass-market consumer
When analyzing a population of people, or target market, there are generally two layers to consider: demographics and psychographics. Social media data
can provide insight into both of these layers and, different from traditional market research, allows for the study of connections between people, at scale — the study of the social graph. This takes us a step closer to true sociological insight, understanding the interest patterns, cultural dynamics, and interconnectedness of a large audience.
To conduct this type of analysis, we isolated users discussing cryptocurrency on Twitter, specifically those talking about crypto considerations, their investment outlook, and emotions. Ultimately, we extracted data for more than 10K unique users and ran it through Audiense’s tool for segmentation analysis.
Audience mapping revealed 5 main segments, which represent 80% of the cryptocurrency social audience. The map above depicts a sample of the nodes within the audience, representing more or less influential users by size, as well as how they cluster and connect to one another.
While the cryptocurrency audience is demographically diverse, their top affinities follow a common thread, with a strong focus on technology, finance, and entrepreneurship. That said, 5 separate personas emerge, distinct in terms of why they are drawn to crypto, who influences their thinking, and how important crypto is relative to their broader interest profile:
3. Tracking adoption & interest conversation
Evaluating perception of cryptocurrency as a technology
The recent explosion in cryptocurrency interest raises questions about how well the public understands the technology, and how they feel about its future. We’ve set out to measure how these factors of comprehension and emotion are influencing participation in the space.
The mainstream audience is still at square one in its understanding of cryptocurrency, asking: what is it?
Of conversations in which people are asking questions about Bitcoin and other cryptocurrencies, a majority are asking, What is it? This holds true across all age groups and is most pronounced among people 35–44 years old. 25–34 year-olds show a slight edge in terms of eagerness to invest, leading the Where to buy? conversation. And interestingly, 45–54 year-olds drive the Who accepts? conversation, suggesting that this age segment is more likely to judge the legitimacy of a currency by the strength of its payment use cases/applications.
This lack of even a basic understanding of cryptocurrency — what it is, how it works, and why or if it’s valuable — viewed alongside Bitcoin’s hockey-stick price chart, leads many to believe we’re in a bubble. The logic may flow as follows: prices are skyrocketing, yet most investors do not understand what they are investing in and cannot prove its value, which signals a market propped up by pure speculation — this is a bubble! However, others see a different story forming, a story better told by an adoption curve than a price chart. Among the early adopters/early majority we’ve identified talking about crypto, 51% still seek to understand the fundamentals, basic use cases, and applicability to their lives. What if, instead of labeling crypto the hot new asset class, we instead thought of cryptocurrency as a new technology?
Bitcoin has been in existence since 2009, though our data suggests we only hit the tipping point of mainstream awareness as of late 2017. Or, we can give the benefit of the doubt and start the clock in 2015, at which point we first see meaningful levels of social buzz start to register. Either way, that means we’re still only one to three years into crypto’s breakout. In this time, adoption rates have begun to trace the start of an s-curve, a progression emblematic of many of history’s game- changing innovations. Referencing Coinbase’s user growth as a simple proxy, this exponential growth trend in cryptocurrency usage is clear. We also see this trend mirrored in search and social conversation behavior.
What’s not clear — and won’t be clear until we have the opportunity to look in the rear- view mirror — is whether or not the recent dip in price, search, and social buzz volume is just a blip on the radar or a signal of a greater negative trend. Prices are impacted in the short term; is it also a stumble on the way to adoption?
Sentiment tides have shifted in a positive direction, but pessimism still prevails
Moving beyond volume measures (price, adoption, searches, etc.), social data uniquely allows us to analyze sentiment — how people feel about cryptocurrency. Despite the many positive indicators around crypto, the overall climate may best be described as “skeptical,” as pessimism leads the emotional chatter. However, it seems opinions are gradually changing course; since October 2017, pessimism has decreased by more than 10%, while optimism and predictions conversations have increased.
Blockchain is the hook that stokes mainstream belief in cryptocurrency, while other tech attributes fade to the background
While a majority of the audience openly admit a fundamental lack of understanding of cryptocurrency, or of Bitcoin specifically, many are quick to talk about Blockchain. The idea of a cryptographic ledger is the top technical attribute of cryptocurrency that people discuss. This buzz is surely spurred on by corporate messaging; just as enterprise businesses have evangelized “the cloud” ad nauseam, Blockchain is now invoked as a way to announce another new wave of innovation to the marketplace.
Blockchain attracts roughly 2x the amount of buzz about Exchanges, Wallets, and ICOs combined, which is notable as these latter attributes are arguably more closely tied to the average investor’s/user’s experience. Practically everyone trading or holding cryptocurrencies needs to visit an exchange to buy in, and needs some sort of wallet to store their holdings; other, more adventurous investors may even want to get in on the ground floor through ICOs (initial coin offerings — like an IPO for cryptocurrencies).
Furthermore, the attributes that ascribe value to a cryptocurrency like Bitcoin — namely its scarcity and decentralized nature — are discussed even less often. Ideas such as mathematical scarcity, security through cryptography and proof of work, and the newfound ability to circumvent trusted third parties, have not yet gained traction among the mainstream.
So why does Blockchain rise to the top? Whether consumers are convinced of its potential or are simply playing back effective marketing, Blockchain has proven its stickiness. Perhaps it’s the perfect “reason to believe,” a perception lever that boosts confidence in crypto as an investment and lends a sense of technological longevity. Think: Blockchain as the anti-bubble.
4. Analyzing chatter about motivations & barriers
How the mainstream discuss usage and investment considerations
There has been a rush to get into crypto for the short-term gains and potential long-term upside — but what other uses are people discussing beyond trading and holding? For those hesitant to jump in, perhaps questioning the true value or risks, what exactly is holding them back?
The killer app that people want from cryptocurrency is frictionless payment & money transfer
Current behavior sees Bitcoin’s main use case as a store of value, rather
than a liquid payment system. Like gold, investors tend to buy and hold Bitcoin, expecting some degree of long-term stability and potentially huge upside (this behavior is also common with many other cryptocurrencies). However, when discussing applications of, and support for, cryptocurrency, people often call for frictionless money-transfer. Conversation around integration with transaction services such as Paypal, Square, and Western Union is frequent, outpacing buzz about crypto’s potential role in new investment funds and advisory services, Travel spending, Fundraising, etc.
Want a hint about the public’s long-term outlook? A not-so-insignificant 8% of all conversation about cryptocurrency use cases mention retirement savings.
Perception of cryptocurrency as an enabler of “shady” business has faded
Those familiar with the early days of crypto buzz may remember the unfavorable narrative around Bitcoin, fueled by the media’s focus on Bitcoin’s use on the ‘dark web’ (see: Silk Road). Fast forward to today, and 95% or more of public chatter around cryptocurrency use focuses on legitimate applications. Buzz around the role of cryptocurrency in black market activity such as weapons and drug trading has diminished. At this point, it is more common to see crypto referenced in other obscure circles, namely disaster prep discussion: communities of “preppers” consider holding cryptocurrency as a fail safe against the possibility of a collapse in the banking system.
Among the mainstream, security concerns are the main barrier to entry
Measuring public perception of cryptocurrency — or any other entity, brand, or trend, for that matter — invites complexity. There are multiple signals to interpret from social data, which can’t simply be reduced to one sentiment data point. In the case of crypto, sentiment analysis shows a slant toward pessimism or skepticism, often expressed in terms of one’s price predictions. Meanwhile, from the same dataset we also find clear evidence that perception around Bitcoin’s legitimacy is improving, including strong demand for various use cases beyond “holding” as a store of value.
Analysis of specific considerations allows us to draw more definitive conclusions. Of course, not everyone contributing to the cryptocurrency buzz is rushing to buy in, but these users are dropping hints about what they see as either the main motivators or barriers to purchase and usage. When it comes to top considerations there is some variation across age groups, though concerns about security are generally top of mind. Many articulate this through worries about the “safety” of their investment, or through questions about the vulnerability of the cryptocurrency ecosystem: Is my Bitcoin protected, insured? What if I get hacked?
Accounting for just as much volume as security, privacy discussion is more likely to be favorable, revealing consumers’ motivations for crypto investment and trading. This portion of the conversation tends to include positive mentions around themes such as anonymity/identity, encryption and traceability.
On the other hand, and running counter to one of our initial hypotheses, volume around government regulation and legal considerations is relatively low. Negative buzz about taxes and fees is also minimal, predominantly driven by older members of the audience. Here is a quick look at the top considerations by age segment:
→ 25–34 year-olds lead Privacy conversation
→ 35–44 year-olds lead Security & Safety conversation
→ 45–54 year-olds are relatively more vocal about Market Cap & Fees
It is clear that Bitcoin, and cryptocurrency generally, is creeping into the mainstream consciousness. While there’s still plenty of skepticism around this relatively new technology and asset class, many social data indicators point toward a more positive outlook: pessimism is on the decline, the topic is reaching a diverse online audience, and rising prices are correlated to conversation momentum. We’ve moved past the point of niche interest and into an early phase of public participation in cryptocurrency; whether that move is feeding a bubble or a healthy market, time will tell.
Big thanks to Lidia Cambon, whose data viz & design work is featured throughout this post, and to @hautepop for the thoughtful edits. For more information on the software and data used to conduct this research, check out Pulsar Platform.
And thank you for reading — you can find me @marc_it on Twitter if you’d like to chat crypto, social data, or anything in between. You can also follow Depth Department for future research & creative dispatches.