It seems like Bitcoin is in the financial headlines every single day. There’s always Bitcoin news, even when the currency’s price stays completely flat. The financial media loves to talk about Bitcoin—and as a result, so do investors.
The problem with all the Bitcoin news is that it tends to sway the price of BTC investments. In the era of the 24-hour news cycle, no one wants to read that nothing is happening. So, by way of media narrative, something is always happening. Bitcoin is always “poised for a run” or “facing major headwinds” or “subject to extreme volatility.” Someone always has something to say about Bitcoin.
When the talking heads start jabbering, casual investors listen to what they have to say. People who haven’t done their research or who see Bitcoin as a gamble instead of an investment tend to buy into the headline of the day. If it’s good, they buy Bitcoin; if it’s bad, they sell in a panic. The result is volatility.
A Picture of Volatility
For better or for worse, Bitcoin is trendy. It’s a new form of investment (<5 years) and has lots of buy-in from people seeking to capitalize on a new form of wealth generation. This means seasoned investors and hobbyists alike hold BTC.
The history of Bitcoin reflects how volatile the currency has been. It debuted at $327 USD in 2015. Since then, has reached a peak of $20,000 USD in 2017, a fall from grace to $3,000 USD at the end of 2018 and another meteoric rise to $10,000 USD in 2019. Between these peaks and valleys there are many ups and downs—the currency has been known to jump and tumble as much as $2,000 USD over the span of a week or two, for months at a time.
If you look at the latest Bitcoin news, it’s easy to see why Bitcoin is so volatile. It’s constantly being touted or bashed as either a brilliant investment or a ridiculous farce. There’s rarely any in-between and rarely any level-headed comments about Bitcoin as an investment vehicle.
New News All the Time
The constant headlines surrounding Bitcoin are usually what’s driving the value up or down. If Bitcoin news today is positive, the value will go up; if it’s negative, the value will fall. It’s the same for any other fluctuating asset.
The problem is, Bitcoin is the only real investment of its kind out there. There are almost 3,000 publicly-traded companies on the stock market and hundreds more on international markets. This diversity usually means diverse coverage, as well. A stock might be in the news for a week or more before it quickly falls out of vogue for news about a different one.
Bitcoin doesn’t have that luxury. Sure, there are other cryptocurrencies out there, but none trade as high as BTC or have the same following. You might hear the occasional headline about Ethereum (ETH) or Litecoin (LTC), but it’s never more than a blip on the radar. If there’s news about cryptocurrency, Bitcoin is always in the conversation.
With the focus solely on Bitcoin, the conversation always has to have a narrative. And, that narrative is always going to fluctuate. Everyone is looking for the hot new take or the fresh new angle—something to distinguish their coverage of BTC. In reality, they’re usually just rehashing an old story with a new spin. The news about Bitcoin is cyclical.
Is No News Really Good News for BTC?
If the news cycle dictates how Bitcoin rises and falls, wouldn’t no news be the best news? Unfortunately, not.
Because BTC news helps determine the price, it’s essential to have analyst projections available. Much like there’s a spot price for gold and other commodities, Bitcoin needs a constant valuation that’s based in demand for the currency. If no one reports on Bitcoin it’s hard to derive a valuation.
The constant news about Bitcoin is a double-edged sword. It’s bad because the media plays a big part in the current narrative, which adds volatility to the value of the currency. But it’s also good, since frequent news can increase user adoption.
Many investors hope that in the future, more cryptocurrencies will establish themselves like Bitcoin has. Diversity in crypto news will help draw some of the attention away from BTC. In the meantime, investors just have to roll with the punches and take the gains where they can get them.