From forums to today’s social media, media and cryptocurrency do indeed have a very close relationship. Truth be told, the media have played an essential role in the current success of cryptocurrency.
Why? Well the reason may lie in the fact that the first cryptocurrency transaction was traded via the Bitcoin forum!
How? It all started on a small forum called Bitcoin Talk, where Laszlo Hanyecz posted a Bitcoin transaction for two Papa John’s pizzas. This is how the two pizzas were bought for 10,000 Bitcoins (which would be worth millions today !!!).
This simple social forum transaction led to bigger things weaving the relationship between social media and cryptocurrency.
It is good to remember that social networks are one of the favorite places where people seek their news.
When Elon Musk tweeted #Bitcoin
Nowadays, social events, as well as social networks, have a very strong influence on the crypto-verse.
An example of social media would be Mr. Musk’s recent tweets. By changing its description on Twitter to the simple expression “#Bitcoin” the price of this cryptocurrency has exploded by about 20%.
A few days later, he posted on Doge which caused the DogeCoin to jump 50%! The reason for this remains a mystery but the movements of these markets are clearly a repercussion of his tweets.
As for social events, take our current health situation.
Covid-19 in the crypto-verse
At the onset of the crisis, Bitcoin plunged and sank to less than $4,000 in March when the world began its lockdowns due to Covid-19, coincidence? Maybe not.
Since then, several studies have been carried out to understand the effect of Covid-19 on the market and the economy.
Zhang et al. showed that the uncertainty caused by Covid-19 has made stock markets more volatile and unpredictable.
Corbet et al. explored the volatility relationship between Chinese stock markets and Bitcoin. This relationship grew considerably during this period.
Demir et al. showed that there was a negative relationship between the value of Bitcoin and the number of reported cases of Covid-19 as well as deaths (at the start of the pandemic). This is a real cause and effect relationship between Covid-19 and cryptocurrency prices.
Conclusion
This latest research shows that cryptocurrency becomes increasingly popular in times of crisis and is said to be a kind of safety harness as the health situation worsens. These same researchers even advise investors to include cryptocurrencies in their portfolios. So when it comes to investing in crypto, it is important to stay informed about what is happening around us.
