Web3 news outlet CoinWire and digital PR agency Storible have conducted sentiment research of forum and social media discussions within the cryptocurrency community. The goal was to understand "the direction of opinions that crypto investors, enthusiasts, and reporters have about the crypto space and all its offerings."
By using NLP (natural language processing) techniques, sentiment analysis, also known as opinion mining, allows researchers to understand the general tone expressed in textual information. The tone is assessed in a generalized way, categorizing data into one of the three major sentiments: positive, negative, or neutral. However, the primary focus of CoinWire’s and Storible’s study was to determine "whether its positive or negative score outweighed the other."
The textual data for this research was sourced from two prominent social media platforms: X and Reddit. CoinWire reports compiling a selection of 19,477 X posts on topics related to cryptocurrencies published in the last twelve months. The number of Reddit posts considered in the study was even greater - 20,460.
Additionally, the research team evaluated sentiment in 17,966 articles posted within the last twelve months by the ten news publishers with the highest traffic.
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According to CoinWire, there is a strong positive sentiment among crypto users despite the challenges experienced by the market this year, including regulatory crackdowns by global authorities, as well as the SEC, and security incidents affecting numerous Web3 protocols.
For instance, the study has revealed that 84% of assessed crypto discussions on Reddit were positive, while 65% of posts on the X platform were also optimistic. Interestingly, the most bullish attitude toward cryptocurrency was expressed by X users from the United Kingdom, whereas users from Argentina seem to have the most negative opinions about the industry, with 67% of posts made from this country presenting skepticism.
Meanwhile, investors in the USA are also bullish. According to CoinWire, "nearly two out of every 3 American investors have a positive view toward cryptocurrencies in 2023."
Furthermore, CoinWire reports that "a significant proportion of cryptocurrency mentions in top publications lean toward the positive side, reaffirming the growing influence of digital currencies in the mainstream."
Despite the negative events affecting the crypto space this year, there was still enough favorable news related to cryptocurrency, which resulted in 83% of studied articles featuring a positive outlook.
Cointelegraph, the crypto industry news agency, has had the strongest positive sentiment toward the industry out of the ten leading platforms covered by the study, with 86% of publications favorably mentioning crypto projects. Another crypto news agency, CoinDesk, had 83% of such publications, which is the same as it was in the case of the influential newspapers The New York Times and The Guardian.
Meanwhile, even though the news outlet Reuters turned out to have the fewest positive publications about cryptocurrency in 2023, 79% of its references to the industry were still optimistic.
Sentiment toward particular cryptocurrencies
To understand the attitude of internet users toward the cryptocurrency industry even better, CoinWire and Storible delved deeper into discussions mentioning particular coins.
Curiously, the position of the cryptocurrency gathering the most positive perception in 2023 was shared by three coins: SOL (Solana), UNI (Uniswap), and USDT (Tether). The third one was particularly unexpected to encounter among the leaders considering the history of controversy surrounding the assets backing up this stablecoin. Each of these cryptocurrencies enjoyed 88% positive online discussions.
Some of the bullish events that might have helped SOL, the token of the open-source blockchain platform Solana, to garner such attention, might have been the technical enhancement of its performance and scalability, the launch of Solana Mobile Stack, as well as the support from the meme coin Bonk that helped the protocol’s recovery from the 2022 FTX collapse.
According to CoinMarketCap, SOL started 2023 below $10 with a market cap of $194.22 million, while its price at press time was around $71.50. Within less than twelve months, the market cap of this coin has reached almost $30.5 billion.
In all likelihood, the boost in UNI’s reputation might stem from the increased adoption of Uniswap, which was triggered by the move of the DeFi app ecosystem to the BNB Chain, aiming to reduce Uniswap DEX’s fees and attract more users.
As per the data from CoinMarketCap, UNI’s price declined from over $7.3 in February to roughly $4 experienced in November. At press time, the token was traded at $6.24. Although judging by the research from CoinWire, the cryptocurrency enjoys a positive perception from investors, it still has not managed to get closer to its all-time high from April 2021, when the coin was traded at almost $43.
As mentioned above, there was a lot of controversy about the reliability of USDT as a stablecoin. However, as per CoinWire’s study, USDT has been perceived by the online crypto community exceptionally favorably, which may be the result of Tether’s improved transparency policy, including publishing reports on regular audits of the company’s reserves.
Additionally, USDT has been reaching even more protocols and platforms, including Algorand, EOS, and Avalanche, while Tether has been innovating and developing services and applications of its stablecoin. As a result, Tether’s market cap has spiked, growing from nearly $83 billion in September to over $90 billion in December.
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USDT, UNI, and SOL are followed by TON (Toncoin), the native cryptocurrency of the TON network. The coin, launched in 2018, has recently experienced a decline in its price from nearly $2.70 to $2.13 at the time of publication. Meanwhile, the study from CoinWire shows that this token has been mentioned with positive sentiment in 82% of assessed related discussions.
Meanwhile, Bitcoin has been the subject of 75% of positive related discussions, whereas only 68% of online discussions mentioning the native token of Binance, Binance Coin (BNB), had a positive sentiment, which was the lowest result among the cryptocurrencies mentioned in the CoinWire’s report.
"Binance Coin (BNB) stands out as the most negatively viewed cryptocurrency, with 32% of Its discussions scoring negative," CoinWire emphasizes. Unfortunately, after reaching the recent high of $348.18 on April 17, the token has lost quite a lot of its value, trading at nearly $255 at the time of publication.
Market sentiment and its role in the cryptocurrency industry
Cryptocurrency market sentiment is rather complex and depends on diverse factors. While the cryptocurrency market is volatile, sentiment also varies, particularly depending on the geographical location, as illustrated in the results of CoinWire’s research. At the same time, market sentiment is significantly influenced by the media.
Events surrounding particular Web3 projects and the crypto industry, in general, shape the attitude of the community towards these projects; however, the challenges they experience do not always translate into lower sentiment.
In practice, the crypto market sentiment is interconnected with various market aspects, capable of impacting trading volumes and price movements, and, at the same time, being affected by the same factors.
Besides its influence on trading volumes and coin prices, market sentiment significantly contributes to market psychology, affecting cryptocurrency volatility, investor behavior, market trends, and even regulatory response. Market sentiment plays a particularly significant role in the success of initial coin offerings (ICOs) and token sales.
