How Does Social Media Impact Bitcoin’s Value?
You have surely heard about the astronomical rise in Bitcoin’s price over its 12 year history. It has outperformed literally every asset class in history.
However, you probably don’t know what caused this astronomical rise in value over the past 12 years. Of course, the amazing blockchain technology has something to do with it, but that’s not the only part of the story.
There is a lot of great blockchain technology out there, some of it objectively better than Bitcoin (ie. Monero), that does not see the same increase in value as Bitcoin.
With that in mind, we will cover the impact that social media has had on the value of Bitcoin. The impact of social media on Bitcoin’s value, as you might expect, has been tremendous. In fact, Bitcoin would not be where it is today if it were not for its ability to get people talking about it on social media.
What is Social Media?
Social media is generally defined for applications or websites that have an emphasis on community input to generate content. Popular examples of social media include Reddit, Facebook, TikTok, and Instagram.
It can also include forums and, for the purposes of this article, will also include news media because news media generally reports on topics that become popular on social media.
More importantly, social media represents a sort of focus of human consciousness on a particular topic. We won’t get too metaphysical in this article, but it is important to note that major aspect of social media.
Bitcoin’s Relationship with Social Media
Bitcoin has had a relationship with social media since the start. The project was originally launched by Satoshi Nakomoto on a forum called BitcoinTalk.org in 2009.
This forum was mostly populated by cryptographers and cypherpunks. And Bitcoin was a solution to the double spend problem, with some pie in the sky goals of it becoming a world reserve currency and replacing the fiat currency.
It was mostly a small number of cryptographers on the forum, though. The total registration was under 1,000 for at least a year after the launch of Bitcoin.
Here’s where it gets interesting with social media and the relationship with the value of Bitcoin.
If more people are talking about Bitcoin on social media, then the value of it increases. This is quite obvious when you look at the price history of Bitcoin.
In the beginning, only a few hundred people were talking about it on BitcoinTalk. As you might expect, the price of it was not particularly high.
It was essentially free for the first year of its existence. Again, no one really knew about it, so not enough people found it valuable for it to be worth anything.
This slowly started to change as more people began using the cryptocurrency. The first major exposure Bitcoin had to social media outside of the BitcoinTalk forum was when Laszlo Hanyecz purchased a pizza with Bitcoin in 2010, but the price still remained rather low because Bitcoin did not receive much social media from this stunt.
And this brings us to our next topic, which is something that began the launch of Bitcoin into the mainstream.
There’s No Such Thing as Bad Publicity
P.T Barnum is often credited with the saying, “There’s no such thing as bad publicity.”
Whether or not he said it is irrelevant. The idea behind the saying rings true – if people are talking good or talking bad about something, then it’s a good thing.
Bitcoin received this type of publicity when The Silk Road launched in 2011. For those that don’t know, The Silk Road was something called a darknet marketplace.
Basically, it was a privacy enhanced website that allowed people to purchase all kinds of illicit goods. You obviously can’t use Visa or MasterCard to purchase marijuana, fake IDs, cocaine, or other illegal things.
So, what was the payment of choice on The Silk Road?
This led to a few things for Bitcoin.
For one, a lot of people that would not otherwise know about Bitcoin discovered it when making purchases on The Silk Road.
Secondly, Bitcoin began receiving a lot of attention on social media as The Silk Road became increasingly popular. The attention was usually not positive and revolved around clueless people clamoring for the government to ban cryptocurrency.
Remember the point about the value of Bitcoin increasing as more people talk about it?
That applies whether people talk about Bitcoin positively or negatively.
There really is no such thing as bad publicity.
How Does Social Media Impact Bitcoin’s Value in 2022
We have mostly focused on how social media led to people discovering Bitcoin nearly a decade ago and how that discovery led to a price increase.
It’d be reasonable to assume that everyone already knows about Bitcoin, so the price can’t really increase much, right?
Wrong, Bitcoin is still a relatively new technology. People generally have no clue about how it works, how to purchase it, or what it actually does.
This is where social media enters the picture, again.
The basic premise still rings true to this day, the more people discussing Bitcoin on social media; the more the value of Bitcoin increases.
The only difference is now we can apply the news media to this equation because they do have a rather influential voice and do discuss cryptocurrency.
Social Media’s Impact on Bitcoin
To summarize, social media has a tremendous impact on the value of Bitcoin. You should view social media as a sort of microphone for crowd behavior.
The more discussion something has on social media, then the louder the microphone to the general public.
Social media also serves as a good marker for the popularity of any given topic. A popular saying goes something like, “If a tree falls in the forest and no one is around to hear it, does it make a sound?”
The 21st century equivalent of that would be, “If an amazing, paradigm shifting technology exists and no one is discussing it on social media, does it even exist?”
The answer to both of those questions is no. As great as something is, it only exists if people know about it. If people know about it, then they will certainly discuss it on social media.