Bitcoin (BTC) may have been buoyed by its latest bull run, but the hype surrounding the apex cryptocurrency is underwhelming according to a key metric, reported Cointelegraph Tuesday.
What Happened: Since 2019, Bitcoin’s price is above its Hype-To-Activity ratio — a measure of tweet volume against asset trading volume, according to data from The Tie, a cryptocurrency outfit, Cointelegraph noted.
An August 2019 The Tie study indicated 1.02 to be the average Hype-To-Activity Ratio across the industry.
In most of 2018, Bitcoin’s Twitter hype had outpaced its price. An intersection occurred in May 2019 and thereafter Twitter hype continued declining and has remained below the price since the latter half of May.
During Bitcoin’s latest peak of Jan. 8, the cryptocurrency reportedly held a 1.24 Hype-To-Activity score, which is only marginally above the average industry levels.
Why It Matters: Mainstream media coverage of Bitcoin picked up after October when institutional investors like MicroStrategy Incorporated (NASDAQ: MSTR) and Square Inc (NYSE: SQ) announced investments in the cryptocurrency, noted Cointelegraph.
See Also: Business Analytics Firm MicroStrategy To Rely On Bitcoin As Primary Treasury Reserve Asset
The Tie’s CEO Joshua Frank told Cointelegraph that after Bitcoin crossed the $20K mark in December, the average Tweet volume on the cryptocurrency was only half of 2017-2018 highs.
“The lack of Twitter conversations suggests that those initially buying were a small number of large investors, rather than a large number of small investors,” said Frank.
The trend may be changing of late as record-level Bitcoin mentions took place close to the cryptocurrency’s latest correction.
Frank revealed that they found an “extremely high sentiment in conjunction with abnormally high Twitter activity tends to be a negative signal on Bitcoin price in the short to medium term.”
“Bitcoin’s long-term sentiment is near an all-time high,” as per Frank. The long-term sentiment is a measure of how positive conversations have been over the past 50 days compared to the previous 200 days.
Price Action: Bitcoin traded 5% lower at $33,733.97 at press time. Grayscale Bitcoin Trust (OTC: GBTC) closed 4.06% higher at $38.92 on Tuesday.
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.