Back in 2014, at a bitcoin and cryptocurrency conference I attended in Dublin, Reddit's r/bitcoin forum was mentioned many times on stage and even more by the audience. This was three years before bitcoin was thrust into the global limelight by its epic 2017 bull run that saw the bitcoin price soar from under $1,000 in January to around $20,000 by December— making it easily the decade's best investment .
Reddit was once very important to bitcoin and the cryptocurrency community—but now that no longer seems to be the case.
Reddit's bitcoin community, r/bitcoin, used a MS Paint-drawn wizard to advertise bitcoin as "magic ... [+] internet money."
Reddit / u/mavensbot "Does anyone else remember the 'bitcoin: magic internet money' MS Paint ad circulating on Reddit in 2013," Nic Carter, a partner at blockchain-focused Castle Island Ventures and creator of bitcoin and crypto data site Coinmetrics, asked on Twitter back in 2017. "I loved that stupid ad."
"Nothing bolsters my faith in a currency like a crappy MS Paint doodle," one Reddit user said of the ad when it was created . The ad was made by another still-somewhat-active Reddit user going by the name mavensbot .
The r/bitcoin subreddit, created in 2010, now boasts almost 1.3 million subscribers—more than double it had at the peak of bitcoin's 2017 bull run.
But bitcoin discussion on Reddit is bigger than r/bitcoin. There are dedicated subreddits for most major cryptocurrencies as well as broader forums like r/cryptocurrencies—all of which regularly discuss bitcoin and the bitcoin price.
As bitcoin and cryptocurrency prices spiked in 2017, bitcoin mentions across Reddit kept pace, data collected by analysts at cryptocurrency data platform ChartStar this week revealed.
Bitcoin's subsequent sell-off throughout 2018 saw bitcoin mentions fall along with the price.
However, last year, when swirling rumors technology companies including social media giant Facebook and iPhone-maker Apple were gearing up to jump into cryptocurrency pushed up the bitcoin price, something changed—the number of bitcoin mentions on Reddit failed to climb inline with the bitcoin price.
The number of Reddit comments on bitcoin tracked the bitcoin price closely until the Facebook ... [+] libra-inspired bitcoin rally began last year.
ChartStar "As institutional investors and more mainstream companies have expressed interest in bitcoin, it's managed to break away from the dependence of niche communities like r/bitcoin," said ChartStar's chief executive David Gilbert, who put together the research with his colleague Sam Smith. "It's a sign that bitcoin has matured and is starting to hit the mainstream."
Gilbert and Smith analysed billions of Reddit comments made over five years, finding that bitcoin mentions appeared to break from the bitcoin price in May last year, noting that before this "several significant price movements [were] precipitated by a noticeable change in Reddit comment frequency"—Reddit could have been used to predict the bitcoin price.
The last two years have seen global financial institutions from JP Morgan to Goldman Sachs buy into bitcoin, cryptocurrencies and blockchain technology. Once thought of as an alternative piece of financial technology, overheard bitcoin-related coffee shop chats are more likely to involve startup CEOs and finance executives as grassroots libertarians and economic revolutionaries.
Meanwhile, some smaller Reddit cryptocurrency communities continue to closely reflect their respective digital token prices—and Gilbert reckons analysis of these could be used to predict the price of, for example, ethereum and litecoin.
"I suspect there's entities out there right now mining social data for insights," Gilbert said. "I would expect it works best for medium sized market-cap cryptos and using more sophisticated sentiment analysis techniques on the comments than frequency counts."
Litecoin mentions on Reddit still move closely with the litecoin price and some think this kind of ... [+] social media analysis could be used to predict the price of smaller cryptocurrencies.
ChartStar Last year, a post was made on r/bitcoin calling for the bitcoin wizard ad to be removed, with Reddit user TiltMastery complaining: "For anyone to take us seriously in the long term, we all need to grow up. I just find this picture to be immature."
At the time, the bitcoin wizard no longer featured prominently on the forum, sitting at the bottom-right of the newly redesigned site.
"Keep bitcoin weird," replied Reddit user gonzobon . "This is our culture."
Back in 2017, Nic Carter added: "No matter what happens with initial coin offerings, hard forks, Goldman, anti-money laundering and know-your-customer regulations, or China, Russia, and the USA, bitcoin will always be magic internet money to me."
But bitcoin isn't "weird" any more and its "magic" is being dissolved by corporate interests. The individuals who made bitcoin what it is today, discussing bitcoin developments on r/bitcoin a...