From West to East, Google Search Crucial to Crypto Projects’ Success
Its validity may be questioned but a new study on Google search results says they contribute to a lack of trust in the cryptocurrency industry which affects projects’ success and coin prices.
Many in the crypto community follow and monitor Google search trends to gauge interest and make comparisons though it could still be argued not to be the best scientific method to indicate relative interest in cryptocurrencies – especially against US dollar. However, ReputationDefender’s new research seeks to take it a notch higher. It focused on the online reputation of many digital currencies including Bitcoin, Ethereum and Litecoin across four countries – the US, Germany, Japan and the United Arab Emirates.
How it was done
ReputationDefender calculated the total search volume for cryptocurrencies based on Google AdWord data. Then online mentions of each crypto brand were categorized into positive, neutral and negative categories using pre-determined criteria. Keywords in negative online content about a cryptocurrency include ‘hack’, ‘scam’ and ‘Ponzi’ as well as abusive comments about it on an online forum, the comment section of a news article, or on a company’s Wikipedia page. Positive keywords include phrases or words like ‘ICO’ (Initial Coin Offering), ‘ROI’ (Return On Investment), ‘sound investment’ and ‘milestone’. The first 20 positions of Google search results about each cryptocurrency were later analyzed based on the keywords to cross-reference the market sentiment with its market capitalization.
The firm finds that how digital currencies manage their online reputation affects their growth and whether they attract enough external investment. It established a clear correlation between an increase in negative online sentiment about cryptocurrencies and a fall in their market capitalisation. It also notes that a lack of offline material for digital and online services could increase the number of search engine users who will choose whether or not to engage with a brand, product or service based on the search results shown. Hence, the higher a website ranks in the Google search results, the more clicks it will get and the more potential investors will read about it.
There could be a huge swing in negative sentiment about a currency in the West compared to the East. Of all the countries surveyed, the US had the most negative search results, followed by Germany, the UAE and Japan. A key recommendation has to do with the firm’s claim that 85% of search engine users expect to see information in their own language before deciding whether or not to engage with a brand. Hence, it suggests that blockchain projects should “interact with the target audience in their native language, adhering to cultural practices and differences.”
This process of measuring a cryptocurrency’s online reputation in comparison with its financial performance was used to determine how sentiment varies throughout different parts of the world. It also helped to identify the best and worst performing cryptocurrencies in terms of online reputation. In all, the team was able to draw attention to how the sentiment of search engine news and trend data affect the global marketcap in the sampled four countries which were chosen for their large and growing cryptocurrency markets and the firm’s access to blockchain clients there.