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Going mainstream: cryptocurrency narratives in newspapers

Journal: International Review of Financial Analysis

Date: 2024

Author: Clive B. Walker

Abstract:
This paper quantifies mainstream media coverage of Bitcoin to understand how a once niche interest entered public culture. From 2011 to 2022, five key narratives are identified as criminality, culture, politics, price and technology. Price, politics, and culture have become more prominent in coverage while the technology narrative has waned. Coverage that is more political or cultural is associated with subsequently lower returns whereas the criminality narrative is associated with higher returns. Together this suggests that as narratives have become more mainstream, they have created additional demand, despite the negative association with criminal activity.

Link: Google Scholar

Background and Context

Study Period & Data

Analysis of mainstream media coverage of Bitcoin across five major newspapers (NYT, USA Today, Financial Times, The Times, Daily Mail) from 2011-2022 examining how Bitcoin entered public discourse.

Methodology

Used Structural Topic Model to analyze over 8,000 articles to identify key narratives and examined their relationship with Bitcoin returns.

Research Focus

Investigated how media narratives influenced Bitcoin's price movements and public perception as it evolved from a niche technology to mainstream financial asset.

Evolution of Bitcoin Media Coverage Volume Over Time

  • Media coverage peaked during the 2017 price escalation with over 1,000 articles
  • Coverage declined after the 2018 crash but rebounded to new highs in 2021
  • Shows the transformation from niche topic to mainstream financial news

Changing Composition of Bitcoin Media Narratives 2011-2022

  • Technology narrative declined from 39.9% to 29.8% of coverage
  • Price coverage increased from 10.4% to 18.0% showing growing focus on investment aspects
  • Cultural and political narratives became more prominent in later years

Impact of Different Narratives on Bitcoin Weekly Returns 2016-2022

  • Criminal narrative associated with higher returns (+5.3%)
  • Cultural and political narratives linked to lower returns (-7.3% and -5.4%)
  • Shows how different types of media coverage affected market behavior

Bitcoin Returns vs Traditional Assets 2011-2022

  • Bitcoin showed dramatically higher returns (2.77% weekly) compared to traditional assets
  • Traditional assets showed much more stable returns (0.04-0.18% weekly)
  • Demonstrates Bitcoin's unique risk-return profile during the study period

Monthly Media Coverage Impact on Bitcoin Price Changes

  • Price-focused coverage increased from 7.7% in 2016 to 28.1% in 2022
  • Shows growing focus on Bitcoin as an investment rather than technology
  • Reflects Bitcoin's evolution into mainstream financial asset

Contribution and Implications

  • First comprehensive analysis of how Bitcoin narratives evolved in mainstream media from 2011-2022
  • Demonstrates how media coverage influenced Bitcoin's transformation from niche technology to mainstream financial asset
  • Shows importance of understanding media narratives in cryptocurrency market behavior

Data Sources

  • Coverage volume chart based on Table 3 showing article counts across newspapers
  • Narrative composition chart based on Panel A/B comparison in Table 3
  • Returns impact chart based on Panel C of Table 6
  • Asset comparison chart based on summary statistics in Table 3
  • Price impact chart based on narrative evolution data discussed in Results section