The mainstream media reacted to the Bitcoin rally with insults and confusion – but there were a few insightful articles too.
The West Australian, Reuters
Reuter’s piece, carried in many of News Corp’s Australian newspapers, was a straight down the line report, seeking to explain the reasons behind the rise.
“There is no real fundamental explanation as to why bitcoin, the original cryptocurrency, hit a 10-month high on Tuesday morning (Australia time).
“But there is an ongoing blockchain and cryptocurrency conference in New York called Consensus, with big investors and influential market players gathered to network and discuss the current state of the industry.
“Bitcoin had also rallied during previous Consensus conferences.
“Some analysts pointed out that bitcoin’s rally coincided with the escalating trade war between the US and China, which eroded overall market risk sentiment. But it is too soon to declare bitcoin as a safe-haven asset, they said.”
The Washington Post, Bloomberg
Bloomberg covered the story with a couple of straight news reports, but also with this highly critical opinion piece from Lionel Laurent who believes the price rise is a ‘bubble’ driven by the ‘madness of crowds’.
“This is an asset with no cash flows backing it and extremely limited real-world application, and one that is uncorrelated to financial markets. As such, it is driven by the madness of crowds, not fundamental analysis.
“Indeed, talking up the next surge on the Bitcoin index appears to be the only tactic left to the boosters. There are no other new stories left to tell to convert the masses.
“Bitcoin is not a convenient global spending currency, as retailers found out when transaction fees surged in 2017. It’s not a reliable store of value, at least judging by the price drops of more than 80% that have occurred twice in the last six years.
“And it is not a get-rich scheme for the masses, despite those carefully parked supercars on New York’s streets. While more than 2 million Bitcoin addresses hold more than $1,000, only about 118,000 have more than $100,000, according to data on people’s crypto ‘wallets.’”
Bitcoin cheerleaders are dusting off the FOMO playbook (just don’t mention the hacks) https://t.co/lPnJp0I7HG
— Lionel Laurent (@LionelRALaurent) May 13, 2019
When in doubt, trawl social media for explanations from anonymous Redditors. We’ve all done it.
“Bitcoin spiked to more than $7,500 on Sunday … analysts have struggled to identify one single catalyst.
“However, crypto fans have weighed in with competing theories on its sudden rise which ran the gamut from compelling to wildly far-fetched:
- Bitcoin is a Safe haven
- Mainstream appeal (to institutions)
- Exodus from alt coins
- The Bitfinex scandal drove Bitcoin purchases
- The Binance hack proved Bitcoin’s integrity.”
The Financial Times
Alphaville, in the Financial Times, employs 100% withering sarcasm in this hit job that criticizes the idea that Bitcoin has any use at all and makes fun of its proponents. In the first line she sarcastically references another article about ‘a cracking use case for Bitcoin’. That article was 100% sarcastic too.
Well this is embarrassing. Just weeks after we were forced to admit there was a cracking use-case for Bitcoin, we’ve once again been left red-faced. Bitcoin has risen while other risky things have fallen, and in so doing has proven, once and for all, that it is a safe-haven asset.
“Don’t believe in central banks? No worries. Bitcoin is the US 10-year Treasury of the modern era. It hit a nine-month high on Sunday of around $7,400. Nuff said.
“For proof of its risk-free credentials, look no further than Twitter, where you will find plenty of cool-headed market commentary, featuring lists of high-risk things (like shares in actual companies and the currency of the world’s second-biggest economy) in the red, and safe things (like bitcoin) in the green…”
The Daily Express
Now this how we expect the media to react to a Bitcoin rally – with breathless tabloid hyperbole about the price tripling.
“Bitcoin has traded above $6,000 for the first time in nearly six months which prompted cryptocurrency enthusiast Michael Novogratz to claim investors could see the value of BTC triple by 2021.
“Bitcoin had investors captivated in 2017 after an unexpected rise in popularity which had the digital currency rally at over $20,000 before the value dwindled overnight.
“Novogratz suggested the slump marked the bottom of the cryptocurrency and that bitcoin could continue to build up further confidence. But he also warned of the risks of a ‘catastrophic hack’ of crypto exchanges: ‘It would take something like that to shatter this newfound confidence.’”
Another straight news report that attempts to explain the factors behind the rise.
“Bitcoin’s latest surge happened on Saturday…
“With fundamental analysts often struggling to explain crypto markets, traders have recently pointed to institutions increasingly embracing digital coins.
“The likes of Fidelity Investments plans to buy and sell bitcoin for institutional customers soon, and E*Trade is dipping into the trading space.
“Earlier this month, the Bank of Canada and Monetary Authority of Singapore announced that they had sent each other digital currencies using blockchain technology…”
Forbes is one of the few media outlets to cover cryptocurrency consistently and seriously and this is a typically solid effort.
“Bitcoin prices continued to rally today, surpassing $8,000 as continued momentum and positive news developments fueled the latest gains.
“The cryptocurrency’s impressive rally began in early April, when bitcoin surged more than 20% over 24 hours.
“‘Buyers outweighed sellers, and market makers felt the imbalance pressure so they took their markets higher,’ said Jeff Dorman, chief investment officer of asset manager Arca.
“This price appreciation ‘triggered algos, stop losses and liquidations, which only added fuel to the buying pressure,’ he added.
“‘Momentum is driving momentum,’ said Charles Hayter, cofounder and CEO of digital currency data platform CryptoCompare, stating that rising prices have been generating news coverage, triggering FOMO (fear of missing out) and attracting buyers to the space.”
— Forbes Crypto (@ForbesCrypto) May 13, 2019