Acknowledgements

I would like to thank and state my deep gratitude to those who have impacted this project for the better. They include advisor Chase Senk, J.D., M.B.A., reader Branko Bucar, Ph.D.,

Honors Director Ty Hawkins, Ph.D., statistical liaison Laci Fiala, Ph.D., faculty of Walsh

University, friends, and family as they offered me words of encouragement throughout all stages of the thesis process and inspiration to complete a project that stimulated my intellectual capacity far beyond my comfort zone.

“My mind is just a product of fifty years of being taught. I'm no smarter than anyone else, but

I've been taught by some wonderful people.”

-Tony La Russa

TABLE OF CONTENTS

ABSTRACT ...... 1 INTRODUCTION...... 2 RESEARCH STATEMENT ...... 3 LITERATURE REVIEW ...... 3 ...... 3

A DECENTRALIZED CURRENCY...... 5

THE DOUBLE SPENDING PROBLEM ...... 7

BLOCKCHAIN ...... 8

SOCIAL MEDIA AND THE STOCK MARKET ...... 11

MODEL FRAMEWORKS ...... 12

SIGNALING THEORY ...... 14

METHODOLOGY ...... 15 HYPOTHESIS 1 ...... 15

HYPOTHESIS 2 ...... 16

HYPOTHESIS 3 ...... 18

HYPOTHESIS 4 ...... 19

DATA AND PROCEDURES ...... 20

MEASURES ...... 22

DESCRIPTIVE STATISTICS ...... 22

RESULTS ...... 22 DISCUSSION ...... 25 LIMITATIONS ...... 26 FUTURE RESEARCH ...... 27 CONCLUSION ...... 33 REFERENCES ...... 34 APPENDICES ...... 37 TABLES

Table 1: Descriptive Statistics for Key Variables (N=132) ...... 22 Table 2: t-Test Two-Sample Assuming Unequal Variances for Forum Post Outlook ...... 22 Table 3: t-Test: Two-Sample Assuming Unequal Variances for FOMO ...... 24 Table 4: t-Test: Two-Sample Assuming Unequal Variances for the Mentioning of a Business Professional, CEO, or Entrepreneur...... 24 Table 5: t-Test: Two-Sample Assuming Unequal Variances for the Mentioning of Government Policies, Laws, and Regulations ...... 25

1 Abstract

The internet has allowed for a great deal of technological advances in the area of online trading, banking, and investment services. This thesis is concerned with the breakthrough of

Bitcoin, a , named so because of its solely digital presence. It’s revolutionizing digital exchange and taking the world by storm despite being relatively new to the scene.

Bitcoin and other have become popular trading and investment vehicles because of their ability to make online purchases easy and their quite massive, albeit rather unpredictable, appreciation spikes during times.

This thesis is particularly interested in what causes a change in the Bitcoin price index.

Prior research concludes that social media sentiment and what people say on various media platforms can influence the price of various stocks. Perhaps the same happens for cryptocurrencies. Forum posts were analyzed from www.bitcointalk.org to see if their sentiment, whether positive or negative, and content caused a change in the Bitcoin price index. Also, this thesis hypothesized that forum posts that mention a CEO/business professional/entrepreneur, governmental policies/laws/regulations, or the psychological idea of FOMO caused a change in the Bitcoin price index. Results indicate that none of these variables support these hypotheses, and no relationship was found between the sentiment or content of a post and the Bitcoin price index.

2 Introduction

Market caps of some of the most popular cryptocurrencies have eclipsed billions of dollars. Yet they’ve only existed for roughly a decade. Many people claim that cryptocurrencies can revolutionize the way the world trades while others argue they are too risky. Thousands of cryptocurrencies have made appearances since the introduction of the first digital currency,

Bitcoin. Despite this, Bitcoin maintains an overwhelming majority of the market cap of cryptocurrency exchanges and has experienced a value of over nineteen thousand in dollars in late 2017 (“Historical Data,” n.d.). It has, at times, shown promise to be a valuable investment.

However, the extreme fluctuation of the Bitcoin index repels most curious investors.

Bitcoin and cryptocurrency exchanges are relatively new when compared to traditional trading exchanges such as the New York Stock Exchange, founded in 1792, and even the

NASDAQ, witnessing its first trade in 1971. Exchanges like these are arguably more suitable for investors who wish to invest capital in securities or investments that are not as complicated as

Bitcoin to understand. Perhaps prices of cryptocurrencies such as Bitcoin maneuver so much because they are new, or perhaps there are other motives behind price movement. It is self- evident that it is more difficult to predict or speculate the price of Bitcoin using traditional measures that are commonly used for stock and commodity valuation. Thus, it may prove to be beneficial to conduct extensive research on Bitcoin from a different point-of-view.

The view is that of speculation. The availability of social media and instantaneous access to news information via the internet has allowed for decisions to be made in record time. Quick access to information, nonetheless accurate information, is crucial in the economy. Being seconds behind on company updates or other important updates could put some investors at a disadvantage to those who have access to the information first. Moreover, news is not always in

3 quantitative form such as a business hitting revenue estimates. It can take the form of simple statements or claims, usually unaccompanied with firm evidence, about the well-being of something. This is the realm of speculation.

Research Statement

Research into speculation and Bitcoin has resulted in hypotheses whose underlying assumptions are that Bitcoin price index movement is partially attributable to speculation. The source of speculation this thesis is concerned with is that which is harbored within forum posts, particularly those on the popular Bitcoin website www.bitcointalk.org. These hypotheses are listed in the following section and have logically led to the naming of this thesis: “Is Talk

Actually Cheap: What News Articles Have to Offer about Bitcoin and Their Implications on the

Price of the Cryptocurrency.”

Literature Review

Bitcoin

Bitcoin was founded in 2009 by , whose identity is unknown and may even be a group alias. Nakamoto published an article on October 31, 2008 entitled, “Bitcoin: A

Peer-to-Peer Electronic Cash System,” which describes a system composed of decentralized, digital trading using a cryptocurrency known as Bitcoin. Since then, multiple cryptocurrency exchanges have appeared, and many people from around the globe are entering the world of

Bitcoin. There are mainly three ways of acquiring Bitcoin. One can buy it on an exchange such as (https://www.bitfinex.com) or (https://www.coinbase.com) just like stock is purchased on an exchange, sell goods or services in exchange for Bitcoin, or mine it.

Bitcoin is unlike traditional currency that is printed out and distributed. Rather, its presence is purely digital. Moreover, there is no single source that has the authority or power to

4 create and distribute Bitcoin. The U.S. Bureau of Engraving and Printing produces securities at the discretion of the Federal Reserve in the United States. No other person or institution, legally, can create or distribute the dollar. Instead, anyone can create Bitcoin with computer access and free Bitcoin software. Anyone can mint Bitcoin. Users metaphorically mine it just as people physically mine natural resources from the earth. It also takes a large amount of energy to run

Bitcoin mining software, just as actual natural resource mining demands a quite substantial amount of energy.

The actual process of mining and the underpinnings can be quite complex. A most general and basic definition of mining is the process of solving arbitrary and complicated mathematical puzzles to verify transactions and being rewarded with newly created Bitcoin from the . Bitcoin mining is the process of verifying transactions taking place between trading parties, converting the transaction into a digital file known as a block, and adding the block to Bitcoin’s public ledger, the . In return, newly created Bitcoin is given to the miner. Miners create Bitcoin until the limit of twenty-one million is reached, arbitrarily established by Bitcoin protocol.

Getting more specific, miners place a mathematical formula to the block which creates a hash specific to the block. A hash is a representation of a much longer strand of characters. In other words, miners translate the code into a hash and store the block at the end of the blockchain at the time the transaction took place. The original transaction character code is virtually impossible to work out from the hash and attempting to change transaction codes is difficult.

5 Miners create use previous hashes for new transactions, so the blockchain is a chain of transactions in chronological order (“Blockchain,” 2017).

The process is quite complex and expensive, using a large amount of electricity to solve computationally difficult puzzles. The reward can be worth it but is oftentimes not as the shocking kilowatts and computer memory demanded can be costly, even as Bitcoin is highly valued. Bitcoin is stored, regardless of how one obtains Bitcoin, in a digital wallet and can be transferred in and out of the wallet. Questioning investors should note that the Federal Deposit

Insurance Corporation (FDIC) does not insure cryptocurrency wallets like they do for traditional bank accounts (Yellin, Aratari, & Pagliery, n.d.). Bitcoin is largely not recognized as an official currency and backed by the government in many countries, so owners hit by a digital heist are out of luck when it comes to governmental help.

A Decentralized Currency

An important part of cryptocurrencies is their concept of decentralizing monetary trade.

Trading takes place directly between peers without a third party. The third parties are typically financial institutions such as banks which facilitate the transfer of funds between the trading parties. For example, a debit card used to purchase goods, whether it be online or in person, requires a bank to confirm the availability and transfer of funds from the buyer to the seller and to make sure the buyer’s account is decreased by the same amount the seller’s account is increased. Moreover, because of the nature of Bitcoin and its peer-to-peer direct transactions and decentralization of trade, the ledger of all transactions is public. In other words, all members of the Bitcoin community have access to the public ledgers that detail every Bitcoin transaction

6 (Epstein, 2015). The following graphic can aid in understanding the difference between a centralized and a decentralized system.

Centralized vs Decentralized [Digital image]. n.d. Retrieved April 4, 2019 from

https://www.softwareadvice.com/resources/it-org-structure-centralize-vs-decentralize/

On the left is a centralized system, which in this case can be thought of as a monetary system, with each black dot representing a person in the system. An example of a centralized monetary system is that of the United States. It is centralized because every transaction goes through a third party in order for money to change hands. An example of this is when a person uses a debit or credit card to make a transaction. In doing so, the payee’s bank is notified of the transaction, and subsequently declines the balance of the payor’s bank account by the amount of the transaction and notifies the payor’s bank, presumably a different bank, to increase the payee’s account. Bitcoin does not change hands the same way and is more accurately represented by the decentralized system on the right. The black dots can again be thought of as

7 people in the system. Bitcoin is traded from peer to peer within the network and does not go through a third party as in a centralized monetary system.

The Double Spending Problem

One prominent problem Bitcoin attempts to solve is the issue of double spending. Double spending is “signing over the same coin to two different users” (Karame, Androulaki, Roeschlin,

Gervais, & Capkun, 2015, p. 2). In other words, a person transfers the same digital monies to two or more different parties. One can copy digital monies much easier which can be used to purchase goods compared to physical currencies. It is harder to detect false currencies in the digital world than exchanges involving physical money. However, this is not to say that there is no fraud among physical money transactions. Double spending is a serious fraudulent activity.

The problem arises only under the umbrella of digital currency. When a transaction takes place between two parties involving physical currency and the buyer hands physical currency to the seller, the seller is sure that the buyer will not use the same currency to purchase other goods.

However, with digital currency, there is more suspicion from the seller as to whether the currency was really spent on something else or even that the currency is real. This is where financial institutions, or third parties, step in (“Blockchain,” 2017).

Financial institutions such as banks take on the role of the trusted party in a transaction whose job is to process that payment and verify whether the currency is not being double spent by updating ledgers contained within the financial institution. However, this system can prove to be time-consuming as disputes that arise between parties must be handled with the third party involved. This can also be an expensive process as institutions often charge fees for taking part in the case as the trusted entity (Henderson, 2014).

8 The double spending problem exists due to the ability to spend monies that are merely copies or false digital files during a transaction. Digital transactions may seem to take place in real time, but this is often not the case. The process payment timing delay between payment and delivery of goods makes double spending possible. A system that attempts to decrease or possibly eliminate the problem of double spending is that of Bitcoin. Bitcoin aims at solving this problem through the use of blockchain because of the largely irreversible properties of the blockchain (Blockchain, 2017).

Blockchain

Simply put, the blockchain is a digitized version of a general ledger for trades that take place using cryptocurrencies. The blockchain records transactions much like banks that use personal financial ledgers to keep track of transactions. The main difference is how the systems work. In the case of Bitcoin’s ledger, the blockchain, it is decentralized and viewable to the public. Ledgers of banks or other financial institutions are not viewable to the public

(“Blockchain,” 2017).

Banks and other financial institutions have complicated technology that encrypts customer and firm information. However, there is still the possibility of corruption from someone who hacks into the system and locates important information. A decentralized blockchain system consists of every computer with access to the general ledger, making corruption more difficult because every user has a copy of every transaction, and the likelihood of identifying corruption is much greater because of this (Song, Shi, Xu & Gill, 2016).

The blockchain’s difficult corruptibility also lies in the transparency of the chain. Any changes to the chain, which take place when financial transactions occur, are in real time. A

Google Docs sheet where many people have access to viewing and editing the information is an

9 appropriate comparison to the transparency of the Bitcoin network. A person can’t alter or delete a portion of the chain because of its availability to all public parties. Moreover, all financial transactions that use a cryptocurrency, whose system is based on the blockchain, are permanent.

This also virtually eliminates the problem of double spending as financial transactions with

Bitcoin are in real time and irreversible (Song et al., 2016).

Dissecting further, the blockchain is simply what it suggests. It is a chain of blocks with each block representing a transaction. A block is essentially a transaction represented by a virtual file. Each block contains information about a transaction such as time and date of the transaction, the amount, and the addresses of the parties involved. Bitcoin transactions, represented by a block with the potential to add to the blockchain, can only take place if the block agrees with all other previous blocks on the blockchain. Complicated computations allow for this determination. Therefore, transactions aren’t validated by any central authority but just with the current blockchain (“Blockchain,” 2017).

Blockchain is essentially the direct opposite of trust-relationship management in which third parties have total authority over transactions and their trustworthiness. It removes the need for a middleman. Rather, transactions take place via the “go ahead” by other people in the party.

The entire community of users who have access to the general ledger can validate the block chain authenticity instead of one trusted party (“Blockchain,” 2017). Essentially, each transaction becomes part of a timestamp ledger (Karame et al., 2015).

The blockchain seems to offer other advantages that would make it a practical solution to some of the online economy’s problems. One such advantage concerns transaction time between two parties. Transactions between banks or those that involve banks can often take more than one day to clear. The blockchain system of Bitcoin theoretically only needs a fraction of the

10 time needed to clear and settle a transaction compared to the present centralized, third party banking system. Members of the Bitcoin network typically clear transactions in about ten minutes whereas online payments can take a day to clear through the bank.

Controversy

A facet of Bitcoin that is highly controversial concerns the ease of purchases without attaching one’s identity to a particular transaction. Bitcoin has been used for a number of illegal purposes because a name is not attached to the transaction. Moreover, since Bitcoin uses the public blockchain method of tracking transactions, there is no central institution that aids in the tracking of illegal activities to an individual (Sherr, 2017).

Such an illegal attack took place worldwide in May 2017 when a malware program froze the computer screens of many individuals and demanded Bitcoin as the form of payment to unlock the screen. The attack was dubbed WannaCry and affected computers that ran on

Microsoft. The hackers targeted the software because a security defect of the program made it vulnerable to the attackers after a leak from the National Security Agency. The criminals received thousands of dollars in Bitcoin from the attack (Sherr, 2017).

Bitcoin is also used in other illegal transactions such as in online websites that offer a myriad of illegal activities in exchange for Bitcoin. The Dark Web is a private world wide web that requires certain authorization to access, and only authorized officials can grant access.

Users with access are able to visit numerous sites that provide services, usually illegal, to buyers.

On the Dark Web, users can buy and sell weapons, drugs, credit cards, passports, cloned credit cards, acid attacks on individuals, prostitutes, and a myriad of other goods and services. The

CEO of Bank of America, Brian Moynihan, stated in a CNBC Fast Money Halftime Report in

October of 2017 that, "There ought to be a hard look at the policy of anonymous currencies,

11 because the ability to track information of money flowing is one we use seriously against terrorism and as [a tool] against improper, illegal behavior” (Cheng, 2017).

Legality

Bitcoin is relatively new in the world of finance but is making headlines among governments. The legality of Bitcoin differs depending on the country. In the United States, it is legal to use Bitcoin for payments, and they are subject to the same taxes and reporting requirements that traditional securities demand (Acheson, 2018). Moreover, laws vary depending on the use of Bitcoin by users. For example, Bitcoin miners who trade the cryptocurrency for fiat currency or sell it on exchanges are subject to special laws that regulate the respective area of trade or exchange (“Is Bitcoin Legal?,” 2017).

Social Media and the Stock Market

The internet has also allowed for the creation of social media platforms and online forums that allow users to have a conversation about a myriad of topics. Bitcoin has a rather large presence on different social media platforms and forums. However, only a small amount of research has been conducted concerning the connection, if any, between social media and forum sentiment and its effect, if any, on Bitcoin transactions and value.

Due to social media’s extensive existence and the amount of user posts concerning financial markets, it is of particular interest to stock market and investment researchers and speculators to understand how social media may influence consumer or investor behavior.

Social media platforms were created for the sole purpose of communicating stock market information social media because social media was largely being used for transmitting financial information and consumer and investor sentiment. StockTwits.com is arguably the most popular

12 social media network that provides accurate data to its users in order to predict market performance (Piñeiro-Chousa, Vizcaíno-González, Pérez-Pico, 2017).

It is most similar to the social media platform Twitter. Users can communicate to each other in real-time, meaning the sharing of information is quick and thus decisions about the financial market can be made fast. Furthermore, conversations are classified based upon the topic, and users can use keywords to pull up relevant information regarding the keyword chosen.

The platform also lists important notes about each of its users, including their experience as investors and the methods they used in order to determine if a stock is worthy of investment

(Piñeiro-Chousa, Vizcaíno-González, Pérez-Pico, 2017).

Model Frameworks

Other research projects within the scope of this thesis can be highly beneficial during the creation and duration of the project for many reasons. I will analyze them to determine how the researchers examined a topic, developed hypotheses, outlined a methodology, used statistical analyses, and analyzed results to test the hypotheses. For these reasons, the following paragraphs will include information relevant to the thesis.

A research project entitled, “How Does Social Media Impact Bitcoin Value? A Test of the Silent Majority Hypothesis” approaches the attempt of predicting Bitcoin value from a different angle. It also relied on the power of the internet. The researchers wanted to know if social media had an effect on Bitcoin price. The study was carried out largely because traditional economy variables such as governments introducing new monetary policies, interest rates, and inflation might prove disadvantageous in predicting Bitcoin value because cryptocurrency is a decentralized currency with no government backing or third party involved

(Mai, Shan, Bai, Wang, & Chiang, 2018). This is important to this research proposal because

13 looking into news articles about Bitcoin may prove to be beneficial in that they might show that what CEOs, business professionals, or entrepreneurs have to say about the cryptocurrency may influence the Bitcoin price index.

The research project entitled, “Using Twitter trust network for stock market analysis” by

Ruan, Durresi, and Alfantoukh provides the results of a study conducted to determine if social media had an effect on the stock of a group of selected companies. The researchers carried out the experiment due to the common belief that the mood of the public, or rather the attitudes harbored by individuals, expressed on social media platforms is related to financial performance of stocks and commodities in various exchanges such as the New York Stock Exchange (Ruan,

Alfantoukh, & Durresi, 2018).

The project selected the popular social media forum Twitter and analyzed “tweets,” postings of users of the platform, for their sentiment valance. Furthermore, the researchers wanted to see if they were correlated with abnormal stock returns from eight companies in the

Standard & Poor’s 500, a stock market index based on five hundred companies with common stock listed in either the New York Stock Exchange (NYSE) or National Association of

Securities Dealers Automated Quotations (NASDAQ). The researchers also took into account the source of the tweets, accounting for the power or reputation among the Twitter community.

This allowed the researchers to determine if there were sources which were of particular importance concerning tweet valence and a firm’s abnormal stock return (Ruan, Alfantoukh, &

Durresi, 2018). Research was done to see if there was any impact on the stock market, not a cryptocurrency like Bitcoin. The research is nonetheless helpful in constructing a model that uses online information to predict change in the value of an investment vehicle.

“Influence of Social Media over the Stock Market” is another study aimed at analyzing

14 the influence of investors’ activity on social media on the stock market. StockTwits.com was the social media platform used. Researchers analyzed activity and various users on the website to see if they have any impact on the Chicago Board Options Exchange Market Volatility Index, or

VIX. They also took into account other social media variables such as user experience, the number of followers the user had, message sentiment, and holding period of a particular stock the user had at the time. This helped the researchers determine which type of investor and what characteristics exerted the greatest influence through their account on the social media platform

(Piñeiro-Chousa, Vizcaíno-González, Pérez-Pico, 2017).

Signaling Theory

This project largely focuses on explaining the change in Bitcoin index by reviewing the emotions of those with an interest in the cryptocurrency. It is assumed that the Bitcoin index changes due to emotions, whether positive or negative. For example, an increase in the index is assumed to be because of a generally positive sentiment held by people with an interest in

Bitcoin and subsequently purchase it. If one was not favorable toward Bitcoin, he or she would not purchase it. Likewise, if emotions are generally negative toward Bitcoin, it is assumed that the price of Bitcoin will fall, or at least remain the same.

A theory that has entered the world of communication, especially among businesspeople, is that of signaling theory. Signals are everywhere. The theory revolves around the way receivers of information interpret signals another party sends them (Connelly, B. L., Certo, S. T.,

Ireland, R. D., & Reutzel, C. R., 2011). In the case of Bitcoin, it can help explain the way

Bitcoin users interpret information they come across about Bitcoin, whether it be good or bad.

This study’s incorporation of signaling theory is unique because it argues that a major cause of

Bitcoin index change is opinions from the general public, especially among Bitcoin enthusiasts.

15 The methodology to follow this section will detail how posts from an online Bitcoin forum website were used to gather sentiment from Bitcoin enthusiasts to determine the extent to which, if any, sentiment about Bitcoin contained in forum posts can influence the Bitcoin index.

Moreover, this project will look into what Bitcoin enthusiasts are talking about when there exists a fluctuation in Bitcoin index.

Signaling theory can be broken up into four major categories to better help explain the workings behind the model. The model states that signalers send signals to receivers, who must decide what to do with the information, and in turn react based on the information received.

Thus, there are signalers, signals, receivers, and feedback. In this study Bitcoin forum users are the signalers, the forum posts are the signals, the readers of the forum posts are the receivers and react to the information, and the feedback is the movement of the Bitcoin index based on how the receivers reacted to the information. The signals can be negative or positive, and the receivers will react based on whether it is negative or positive. Thus, the feedback by the receivers, who are Bitcoin enthusiasts, provide visible feedback by buying or selling their Bitcoin which is reflected in the change in Bitcoin index.

Methodology Hypothesis 1

H01: There is no difference in the mean Bitcoin price movement between forum posts that have a

positive sentiment and forum posts that have a negative sentiment.

Ha1: There is a difference in the mean Bitcoin price movement between forum posts that have a

positive sentiment and forum posts that have a negative sentiment.

The first hypothesis is centered on forum post sentiment. Investor sentiment plays an important role in the stock market, and maybe it does too with cryptocurrencies. A study titled

16 “The Impact of Investor Psychology on Stock Markets: Evidence from France” analyzed the stocks in the CAC40 Index, an index found in the French Stock Market, over six years to determine the extent that human psychology affects human behavior and trading volume. The study concluded that “animal spirits” help us truly understand how the economy works. The animal spirits phenomenon is an irrational position of investors about the future profitability of a company. The study spotlighted the irrational actions of overly confident and optimistic investors who are more prone to risky investments because of their irrational expectations about the future of a company. Their irrational trading can cause abnormal trading volume volatility and can subsequently influence the prices of stocks (Dhaoui, Bourouis, & Boyacioglu, 2013).

Many Bitcoin traders and enthusiasts are optimistic, and following the logic of this study, can irrationally influence the trading price of Bitcoin. The study also notes that optimism about a security becomes more prominent when information becomes sparer. This is a straying away from the rational mode of thought and letting human psychology develop irrational expectations about a particular security (Dhaoui, Bourouis, & Boyacioglu, 2013). Quite is the case of Bitcoin investors. There is still limited information about the volatility of Bitcoin, and this may cause investors to take on irrational positions and invest in Bitcoin that may ultimately influence the

Bitcoin price index.

Hypothesis 2

H02: There is no difference in the mean Bitcoin price movement between forum posts whose

content includes, whether directly or indirectly, the Fear of Missing Out and forum posts

whose content, whether directly or indirectly, the Fear of Missing Out.

17

Ha2: There is a difference in the mean Bitcoin price movement between forum posts that

mention, whether directly or indirectly, the Fear of Missing Out and forum posts that do not

mention, whether directly or indirectly, the Fear of Missing Out.

The second hypothesis concerns FOMO, the acronym for Fear of Missing Out, and it is also in the realm of human psychology. FOMO is characterized by a person too afraid to act in a way that is different than his or her peers because he or she might subsequently miss out on any resulting gain that others achieve. This is because humans view themselves in terms of others. It is a human characteristic to herd and to act in ways that generally don’t deviate too far from the herd. Researchers have found that this external worry of other people gaining an advantage and missing out causes investors to model their portfolios like professional cohorts in their community. This allows the investor to counter the fear that only other investors bet correctly the winner. Humans compare themselves to others in terms of wealth. People also tend to herd around investments when future earnings seem too good to be true, even if the investment is particularly risky. Humans do not want to be the one person who missed out on the next big thing (Rigoglioso, 2007).

The hypothesis proposes that FOMO behavior is responsible for a movement in the

Bitcoin price index. People do not like to be the odd person out and do not want to be the only person missing out on the large returns Bitcoin was offering at different times. Bitcoin is a risky investment due to its volatility, but FOMO might be able to partly explain why a large group of people invested in Bitcoin. They presumably feared missing out on any gains Bitcoin may produce and acted rather irrationally with the herd.

18 Hypothesis 3

H03: There is no difference in the mean Bitcoin price movement between forum posts that

mention a CEO, Business Professional, or Entrepreneur and forum posts that do not

mention a CEO, Business Professional, or Entrepreneur.

Ha3: There is a difference in the mean Bitcoin price movement between forum posts that mention

a CEO, Business Professional, or Entrepreneur and forum posts that do not mention a CEO,

Business Professional, or Entrepreneur.

The third hypothesis concerns whether forum posts that mention CEOs, business professionals, or entrepreneurs cause a movement in the Bitcoin price index. The hypothesis was derived after reading several sources that indicate comments made by such people can have real effects on security prices. An example that shows the weight words carry is when Donald

Trump tweeted negatively toward Amazon in early 2018. He expressed his negative opinion that

Amazon is abusing the U.S. Postal Service, not paying their fair share of taxes, and putting many retailers out of business. Media outlet Axios subsequently reported on his “obsession” with regulating the company following the tweet. Shares of Amazon dropped eleven percent within a week following the tweet, bringing the market capitalization of Amazon down a massive seventy-five billion dollars (Bloomberg, 2018).

Another tweet involving CEO of Tesla Motors Elon Musk also demonstrates the ability of comments to influence stock prices. Musk tweet in early August of 2018 that he was considering taking Tesla private at $420 a share, causing stock prices to soar several percent in a short span of time. However, this idea still has never came to fruition. The effect the tweet had on stock prices was so controversial that a Securities and Exchange Commission judge ordered Musk to pay forty million dollars in fines due to the tweet. Moreover, the judge ordered the CEO to

19 appoint an attorney to pre-approve any tweets Musk made concerning the company (Hull &

Bloomberg, 2019). These very decisions demonstrate the reality that comments made by powerful businesspeople can have real effects on stock prices. The hypothesis was derived due to the belief that Bitcoin may perhaps fluctuate much in the same way stocks do when businesspeople comment on them.

Hypothesis 4

H04: There is no difference in the mean Bitcoin price movement between forum posts that

mention governmental policies, laws, or regulations concerning Bitcoin and forum posts

that do not mention governmental policies, laws, or regulations concerning Bitcoin.

Ha4: There is a difference in the mean Bitcoin price movement between forum posts that mention

governmental policies, laws, or regulations concerning Bitcoin and forum posts that do not

mention governmental policies, laws, or regulations concerning Bitcoin.

The fourth and final hypothesis concerns governmental action and whether policies, laws, and regulations can cause a movement in the Bitcoin price index. Prior research has concluded that government action does have real effects on at least some stocks. Perhaps it does with

Bitcoin too. A study by Nathan W. Monroe titled “The policy impact of unified government: evidence from 2000 to 2002” (2010) determined that oil and gas stocks rose suddenly following

Republican control and that renewable energy stocks declined in the same period. However, the opposite happened when Democrats were in control. The causes for these shifts in stock prices for the various stocks were largely due to the platforms of each party (Monroe, 2010).

One of the core objectives of the 2000 Republican platform was a change in how the United

States consumes energy. George W. Bush pushed his 10-year, multi-billion-dollar plan that called for an increase in the use of fossil fuels and away from the renewable energy sector.

20 Decisions such as these can make traditional oil and gas company stocks such as Chevron Corp. and Sunoco Inc. desirable and renewable energy stocks like Honda Motor Ltd. And Evercel Inc. undesirable. Findings from the study indicate that investors likely do look into political events and policy changes and reacting to them as they see fit. These such event studies are important because they look into the effects policy changes have on certain investments (Monroe, 2010).

Bitcoin is hypothesized in this study to also share a relationship with governmental decisions.

Data and Procedures

The first step was the gathering of the appropriate data. Only two outside sources were needed, one for the Bitcoin price index and another for obtaining Bitcoin forum posts. The

Bitcoin price index was taken from a popular crypto exchange called www.coinbase.com. The index is available to anyone and is the average of four major Bitcoin exchanges: ,

Coinbase, itBit, Bitfinex. The forum posts were taken from the popular Bitcoin forum website www.bitcointalk.org. Many forum threads exist on the website such as ones dedicated to legal issues and Bitcoin mining, but this study focuses on the subcategory “Speculation,” a child board of “Economy,” the parent board. A child board is a more focused subcategory of a parent board that allows for specific discussion. The child board of “Speculation” is appropriate for this study. These sources were chosen because they are widely known among the Bitcoin community.

The hypotheses were tested using t-tests, also known as a bivariate analysis. A bivariate analysis investigates the association between two variables. Running a bivariate analysis on two variables reveals whether there is an association between them and, if there is one, the strength of the association. A bivariate analysis that reveals an association between two variables gives

21 insight into an explanatory variable, or the independent variable, explains the outcome of a phenomena, or the dependent variable.

The study analyzed forum posts from the Speculation thread on www.bitcointalk.org from December 4, 2016 to June 23, 2018 because it was this period where Bitcoin fluctuated greatly, especially near the end of 2017. The blue indicator in the graph below provides a visual to the area of the time period. The study covered eighty-one weeks.

Bitcoin Price History [Digital image]. n.d. Retrieved April 4, 2019 from www.coinbase.com

A total of 162 posts were originally collected, 81 of positive sentiment and 81 of negative sentiment (see Appendices A and B for raw data). They were selected based on their popularity.

Bitcointalk.com provides the number of views a particular post receives. The most popular forum post for a particular week was solely determined based on which forum posts had the highest number of views. The data was ultimately slimmed down to 132 posts, 66 of positive sentiment and 66 of negative sentiment because the most popular positive and negative forum posts that fell too close in proximity, two days in this study, in the same week and would’ve skewed the results. A price average was calculated for two days before and two days after each selected post as a pre- and post- publication price was required to perform the t-tests.

22 Measures

Each article was further categorized based on the following:

2) Does the post mention a “fear of missing out?” YES/NO

3) Does the post mention governmental policies/reforms/laws? YES/NO

4) Does the post mention a CEO/business professional/entrepreneur? YES/NO

Descriptive Statistics Table 1: Descriptive Statistics for Key Variables (N=132)

Variable Frequency % Fear of Missing Out Yes 5 4% No 127 96% Government Policies Yes 29 22% No 103 78% Business Professional Yes 26 20% No 106 80% Outlook Positive 66 50% Negative 66 50%

Results

Table 2: t-Test Two-Sample Assuming Unequal Variances for Forum Post Outlook

Positive Negative M SD M SD t-Stat DF p-value Change in Price -59.58 674.48 -91.40 723.77 -0.26 129 0.79

23 Table 2 gives the results from running a t-test analysis on data for forum posts that had positive sentiment and forum posts that had negative sentiment. The p value of 0.79 indicates that the relationship between forum post sentiment and the Bitcoin index is not strong enough to conclude that the Bitcoin index change is influenced by forum post sentiment, whether positive or negative. However, looking at the mean Bitcoin index change for the forum posts provides some insight into the relationship, albeit a weak one, between forum post sentiment and Bitcoin index change.

The average mean loss for a forum post with positive sentiment was $59.58. The average mean loss for a forum post with negative sentiment was $91.40. It is important to note that both numbers are negative. However, it is also important to analyze the magnitude of the mean loss.

The mean loss for forum posts with negative sentiment is approximately 150 percent greater than the mean loss for forum posts with positive sentiment. As mentioned earlier, the hypothesis that the Bitcoin index is influenced by forum post sentiment was rejected, but the mean loss for forum posts with negative sentiment were greater than the mean loss of posts with positive sentiment. Perhaps one reason for this seemingly telling but insignificant relationship is due to the period of which data was collected for this study.

Data was collected from December 4, 2016 to June 23, 2018. The Bitcoin index appreciated nearly twenty-thousand dollars during this period. It also depreciated just as fast.

One would question why then both forum posts with negative sentiment and forum posts with positive sentiment experienced a mean loss. The answer likely lies in how rapidly the Bitcoin index increased and decreased. In the earlier part of the dates for which data was collected,

Bitcoin was mostly stagnant but then experienced a large uptick in value. The market cap of

Bitcoin increased by 2,500% in just one year between December 17, 2016 to December 17,

24 2017. One year is an impressively short amount of time for this to happen. The price index, however, decreased in value for most days after Bitcoin had reached this all-time high. Thus, there are many days where the Bitcoin index depreciated compared to the quick uptick of Bitcoin index that could’ve led to the mean for forum posts of either sentiment. Performing an analysis that included more data would give a more exact representation as to the mean increase or decrease for Bitcoin index with respect to forum post sentiment.

Table 3: t-Test: Two-Sample Assuming Unequal Variances for FOMO

Yes No M SD M SD t-Test DF p-value Change in Price -186.16 429.79 -71.13 706.27 0.57 5 0.59

Table 3 gives the results from running a t-test analysis on data for forum posts that mentioned the idea of FOMO and forum posts that did not mention FOMO. The p value of 0.59 results in rejecting the hypothesis that the Bitcoin price index movement is influenced by the mentioning of FOMO. There is not a significant difference between forum posts that mentioned

FOMO and forum posts that didn’t. Moreover, both forum posts that do and don’t mention

FOMO had a mean loss for each post. There is no significance but forum posts that did mention

FOMO resulted in a mean loss of more than double compared to forum posts that did not mention FOMO.

Table 4: t-Test: Two-Sample Assuming Unequal Variances for the Mentioning of a Business Professional, CEO, or Entrepreneur

Yes No M SD M SD t-Test DF p-value Change in Price -16.22 728.63 -90.03 691.91 -0.47 37 0.64

25 Table 4 gives the results from running a t-test analysis on data for forum posts that mentioned CEOs, business professionals, or entrepreneurs and forum posts that did not. The p value of 0.64 means do not reject the null hypothesis and that there is no significant difference in the mean Bitcoin price index movement between forum posts that mentioned Business

Professionals, CEOs, and Entrepreneurs and forum posts that did not. There is a larger mean loss for forum posts that didn’t mention CEOs, business professionals, or entrepreneurs than those that did.

Table 5: t-Test: Two-Sample Assuming Unequal Variances for the Mentioning of Government Policies, Laws, and Regulations

Yes No M SD M SD t-Test DF p-value Change in Price -90.38 467.34 -71.3 751.01 0.17 73 0.87

Table 5 gives the results from running a t-test analysis on data for forum posts that mentioned government policies, laws, and regulations and forum posts that did not. The p value of 0.87 means do not reject the null hypothesis that there is no significant difference in the mean

Bitcoin price index movement between posts that mention government policies, laws, and regulations and forums posts that do not.

Discussion

All analyses resulted in not rejecting the null. There is no significant difference in the means between each variable. In other words, the Bitcoin price index movement was not attributable to forum posts that were positive or negative, posts that mentioned a business professional/CEO/entrepreneur, posts that mentioned government policies/laws/regulations, or posts that mentioned either positive or negative FOMO. However, the results are not by any

26 means the final ruling on this matter but simply a ruling based upon the given data and the way the hypotheses were tested.

Performing the study in different ways might’ve given different results, but this does not mean that the conclusions of this study should dissuade similar future research. Simply, there were limitations to this study that might’ve produced different results. Furthermore, it is encouraged that more research is done on this topic to help develop a more comprehensive idea of the world of Bitcoin and what affects the Bitcoin price index. There is a myriad of options and routes to take, but the following paragraphs delve into some suggestions and areas of focus for future research.

Limitations

A limitation to this project was the amount of Bitcoin exchanges used. This Bitcoin index used in this study was determined based on the price of Bitcoin in four different exchanges. Including more exchanges would result in a more accurate and truer going price of

Bitcoin and thus all subsequent calculations.

Another limitation lies in the assumption that all views of a forum post were in the first two days of publication. This was done because the most viewed negative and positive posts were picked for each week of the study. This ensured that if forum post sentiment and their contents did actually cause a change in the Bitcoin price index then the most popular forum posts would be able to do so. In other words, a forum post with zero views would result in no change in the Bitcoin index because there is no viewer who read the content of the post and presumably and subsequently acted on the information, either by selling, holding, or buying Bitcoin. This is likely not how the actual viewing pattern is and thus is a limitation.

27 A major limitation to this research is the amount of data collected. The amount of data collected if a new undertaking was to be done could be greater than what was used in this thesis.

The practical and obvious limitation of time resulted in this thesis only covering roughly ten percent of the data available on Bitcoin. This thesis covered the timespan of late 2016 until middle 2018. This equates to just over one year, and Bitcoin has been in existence for just over ten years. Including the other ninety percent of data would obviously give a more accurate analysis of how and if the variables in this thesis influence the Bitcoin price index movement.

Performing an analysis on all of the available data might even not prove to be as daunting as a task as it appears given the relative short life so far of the cryptocurrency.

Future Research

Future researchers should keep in mind that even though much more data is available on

Bitcoin than what was included in this thesis, using Bitcoin data in its entirety might not even be substantial or sufficient because it is such a young currency with limited data and information.

Nonetheless, more data would equal a greater representation of what is actually happening.

Including more data is also important because when one observes the price index from afar, it can be seen that the index is arguably worth analyzing toward the more recent years of its existence when the index experienced the most change.

The price index of Bitcoin during its early years was extremely low, and not until 2012 did it reach over ten dollars. Bitcoin didn’t reach one thousand dollars until 2017, the same year its all-time high was achieved. Collecting more data might possibly allow for the research to not have the unpredicted negative mean Bitcoin price index movement this thesis has uncovered.

This thesis covers a relatively short span of time, and a longer span of time might produce results that are different and more predictable because all Bitcoin movements up and down will be

28 analyzed, not just a span of time where the price index increased and decreased in puzzling amounts. Thus, using data for all years of Bitcoin existence might perhaps skew toward a position of supporting hypotheses presented in this thesis or skewing away. Whichever the case, it is likely that the results will be drastically different from those obtained in this thesis because of the nature of collecting larger amounts of data.

It should be noted however that using more Bitcoin data might seem favorable because it would provide more accurate results but using more data also means finding more variables that are hypothesized to cause the Bitcoin price index to move. In other words, if the entire life span of the Bitcoin price index data were to be used and that a researcher wanted to look for variables that might cause the Bitcoin price index to change, the researcher might have a tough time finding them because, especially during the initial year of its life, Bitcoin did not receive much publicity and there were only so many media platforms that dedicated their existence to the topic of Bitcoin.

Some popular Bitcoin websites where large masses of Bitcoin information from users would be available didn’t come out for a few years after Bitcoin was founded. The popular website CoinDesk.com did not make an appearance until 2013. However, the website used in this thesis from which forum posts were analyzed, Bitcointalk.org, did come onto the scene near

Bitcoin’s inception when it arrived in 2009. Despite this, it was not as popular as it is today, and the number of forum posts were much more limited compared to today.

In summation, although websites whose existence is dedicated to forum posts from everyday people, it is obvious and important that analyzing such a new idea and topic comes with limitations because the amount of information is extremely limited during the new idea’s inception. If this thesis were to extend all the way back to Bitcoin’s inception, the limited

29 amount of forum posts might result in inaccurate and unrepresentative results. This basic concept of limited information also applies to other hypothesized variables that might cause

Bitcoin index movement and where data on these variables could be found. Or, data might simply be nonexistent.

Perhaps another critical tangent that could be taken is looking into other suspected variables that seem to cause movement in the Bitcoin price index. There is a myriad of variables that could be analyzed to see if there is significance with respect to the Bitcoin price index.

These variables could focus on other media and social platforms. This thesis was largely modeled after a project that used posts on Twitter to determine if there was any influence from posts on the price index. Variables could also be related to those presented in this thesis but slightly different. For example, this thesis hypothesized that forum posts that mentioned CEOs,

Business Professionals, or Entrepreneurs would cause a greater Bitcoin price index movement than if there were no mention of any of these. A variable that may prove insightful and related to this one could be the resulting movement in the Bitcoin price index when countries formally legalize or ban Bitcoin trading. This is such a critical and important area worth looking into because the future of Bitcoin is based on how countries treat Bitcoin, more specifically how a government’s monetary officials treat cryptocurrencies.

Bitcoin has no real future if it has unfavorable treatment from governments. This is a bold statement, but for good reasons. Speculation on Bitcoin is worthless if Bitcoin stays in its current place where countries are confused about what the real impact of cryptocurrencies on economies are and do not change their minds on them. However, speculation is immensely valuable when countries do change their minds of Bitcoin and decide to increase their tolerance of it. Increasing tolerance could be as major as a lift on a ban of Bitcoin or letting a small

30 business accept Bitcoin as long as the business legally and honestly keeps track of income to pay the due of taxes.

This thesis hypothesized that a forum post that mentions governmental policies/laws/regulations would cause a change in the Bitcoin price index. Although running t- tests resulted in not rejecting the null, the area of government policies, laws, and regulations is arguably the most important area to look into with respect to Bitcoin. The United States government and its respective monetary policy institutions are wielded with power that can easily make or break Bitcoin’s future. Countries across the world have their respective governments and their respective monetary policy institutions that are just as powerful among their own countries. Bitcoin is new and the reactions of governments are justifiably and predictably so, many being on the defensive side, curious and unsure of the effects Bitcoin can have on their economies.

This commentary is particularly concerned with Bitcoin in the United States for means of simplicity as well as the fact that the United States is among the countries where Bitcoin is most popular. Continuing, the IRS’s treatment and classification of Bitcoin is worth talking about because it can have real effects on how Bitcoin is hard pressed on finding itself being used on a wider scale. The IRS classifies Bitcoin as property. This might come as shocking because in the word “cryptocurrency” is currency. Thus, it seems that a more appropriate name for Bitcoin should be “Bitcoinproperty.” Although a simple classification as property instead of currency does not seem like a big deal, it can and does have its fair share of ramifications.

Property is subject to the concept of gains and losses. Every person who has legal ownership of a piece of property recognized a gain or a loss on the sale upon sale of the piece of property. A person realizes a gain on the sale of property when the sales price is greater than the

31 seller’s cost or purchasing the property adjusted by other items such as sales tax and seller costs.

For simplicity, a gain occurs when an item is sold for more than what the taxpayer had invested into the item. Quite logically, a loss occurs when an item is sold for less than what the taxpayer had invested into the item. Bitcoin investors must recognize gains and losses upon a sale of

Bitcoin.

Luckily, an investor’s investment in Bitcoin is usually dollars or other currency that was traded for Bitcoin, also known as the investor’s cost basis. A subsequent sale of this Bitcoin would result in a gain of loss depending on whether the sale resulted in sale proceeds greater or less than what the investor purchased the Bitcoin for. This seems like a relatively simple and harmless concept, but upon deeper inspection, Bitcoin’s classification as property results in a great deal of burden for those who own them.

Gains are taxed by the IRS. Losses are deductible subject to certain limitations that are not worth noting here. Moreover, in order for a taxpayer who owns Bitcoin to know whether he or she has a gain or loss on a sale, there must be ample reporting and record-keeping. This can obviously be a problem for investors who trade often. This can especially be a problem for people who use Bitcoin to purchase things on a daily basis. Trading Bitcoin for items such as a

Subway sandwich requires record-keeping to determine the gain or loss. In this scenario, the purchaser is essentially trading Bitcoin for a sandwich. The purchaser recognizes a gain or loss based on the price of Bitcoin and the price of the sandwich at the moment of transaction. Several purchase with Bitcoin can be seen to be burdensome. The more transactions, the more record- keeping and subsequently the more burdensome.

This is why the IRS’s classification of Bitcoin as property will permanently inhibit

Bitcoin’s widespread use as a currency. There are no stopping people who wish to use Bitcoin

32 much the same way currency like the dollar is, but at the end of the day for tax reporting purposes, Bitcoin is taxed as property and subject to gains and losses. Unless the IRS’s ruling changes, it can be expected that Bitcoin will not be used on a scale any greater than it is today and that the demand for Bitcoin will not increase, and thus the price of Bitcoin will not increase and there will be no worthy speculation and hypothesizing.

The IRS is not the only governmental unit that is hampering the widespread acceptance of Bitcoin. Local governments are making policies that definitely, albeit obscurely, hamper

Bitcoin’s usage by the masses. A case in Philadelphia, Pennsylvania resonates the nation’s reluctance to accept Bitcoin on a large scale just yet (Moselle, 2019). Philadelphia City Council made Philadelphia the first large city to ban cashless stores and the new law will be in effect July

1, 2019. The law came into existence because approximately thirteen percent of the population of Philadelphia are unbanked, meaning they do not have a bank account and thus no debit or credit cards. This is important because there are currently cashless business operating in the city of Philadelphia and other cities and are essentially disallowing the unbanked the shop at the business because they do not have any means of paying other than cash. This law is important for Bitcoin because Bitcoin is purely digital, and a purely digital economy is far from becoming a reality. Governmental monetary policy institutions should be heavily analyzed in future research Bitcoin speculation.

Moving forward, there are nonetheless many other variables worth looking into that are also qualitative variables. Those in this project are qualitative, but they do not need to be.

Concrete numbers would allow for a more objective result after all. They could look into stock prices and whether or not they have any bearing on the Bitcoin price index. Perhaps a strong

33 economy would deter people from investing in cryptocurrency and instead investing money in stocks that are bullish.

Conclusion

Determining the most impactful factors on the change in Bitcoin price remains a daunting task to say the least. This thesis focused on the area of speculation and determining if the movement of the Bitcoin index was impacted by speculation by what Bitcoin enthusiasts had to say. However, results from testing the hypotheses of this thesis were not supported. This is not to say that there are topics of speculation that could have a significant effect on the movement of the Bitcoin index. This thesis only focused on four variables, but there remain many others that are worth performing analyses on.

Bitcoin is relatively new, and it might not be heavily accepted on a large scale, but it already is changing the way businesses do things. Clearinghouses are using the technology of blockchain to facilitate a faster, more efficient, and secure way of transmitting information between buyers and sellers of financial instruments. The world may not necessarily welcome the cryptocurrency with open arms, but the foundations by which the currency is founded upon are changing the way information is stored today. Blockchain, founded and introduced to the world at the founding of Bitcoin, is making headway into some of the biggest investment firms in the world.

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37 Appendices

Appendix A

Change in Bitcoin Price Index by Forum Post Outlook

0 -10 Positive Negative -20 -30 -40 -50 -59.58 -60 -70 -80 -91.40 -90 -100

Appendix B

Change in Bitcoin Price Index by FOMO

0 -20 Mention No mention -40 -60 -71.13 -80 -100 -120 -140 -160 -180 -186.16 -200

38 Appendix C

Change in Bitcoin Price by CEOs, Business Professionals, and Entrepreneurs

Change in Bitcoin Price by CEOs, Business Professionals, and Entrepreneurs 0 Mention No mention -10 -16.21 -20 -30 -40 -50 -60 -70 -80 -90.03 -90 -100

Appendix D

Change in Bitcoin Price by Government Policies, Laws, and Regulations

Change in Bitcoin Price by Governmental Policies, Laws, and Regulations 0 Mention No mention -20 -40 -60 -71.30 -80 -90.38 -100

39 Appendix E

Categorized Bitcoin Forum Posts with Negative Outlook

Week Title Date Author 1* 2* 3*

12/4/16- Next week double top @5530 CNY 12/4/16 lolikop No No No 12/10/16 down we go... 12/11/16- When to expect the next big drop in 12/16/18 Senor.Bla No No No 12/17/16 BTC? 12/18/16- Is the current rally really that crazy? 1223/16 rogerwilco No No No 12/24/16 12/25/16- Manipulation finished. Bubble popping. 12/29/16 kwukduck No No No 12/31/16 1/1/17- HUGE Drop coming! 1/4/17 BitcoinBarrel No No No 1/7-17 1/8/17- Bitcoin price is being manipulated in 1/9/17 Deep Crypter No Yes No 1/14/17 China 1/15/16- Another Crash ? 1/18/17 TRF No No No 1/21/17 1/22/17- Cashing out.... 1/24/17 jacobmayes94 No No No 1/28/17 1/29/17- Is Mass Adoption even possible.. 1/30/17 BitcoinBarrel No No No 2/4/17 Bitcoin Price Crashes as Chinese 2/5/17- Exchanges OkCoin & Pause 2/5/17 Kemarit No Yes No 2/11/17 Withdrawal 2/12/17- Chinese bitcoin traders lost track of 2/14/17 jhl5460 No Yes No 2/18/17 authentic price 2/19/17- THE DUMP 2/21/17 ask Yes No No 2/25/17 2/26/17- This Science Institute openly foresees 2/26/17 Roccker No No Yes 3/4/17 Bubbles (in general!) 3/5/17- It going to hurt..! drop back under 3/8/17 fixmod No No No 3/11/17 1000$ 3/12/17- HARD FORK ON ITS WAY !!? 3/15/17 Xcandol No No No 3/18/17 3/19/17- Bitcoin plunges currently at $929! 3/24/17 mr.mister No No No 3/25/17 3/26/17- I believe we are under a big troll job by 3/30/17 BillyBobZorton No No No 4/1/17 whales and miners 4/2/17- Is this the FUD that we were waiting 4/2/17 conspirosphere.tk No No No 4/8/17 for? 4/9/17- "The price of your bitcoin is 1000 times 4/12/17 Doofus No No Yes 4/15/17 overvalued" 4/16/17- Bitcoin Price Crashes in What Could 4/22/17 alani123 No No No 4/22/17 Be the Begginging of a Selloff 4/23/17- Bitcoin usage is flat 4/27/17 Nagle No No No 4/29/17 4/30/17- China's currency is worth double that of 4/30/17 mcplums No No No 5/6/17 USD. WTF? How is this possible?

40 5/7/17- What would a bitcoin collapse look 5/10/17 bornil267645 No No Yes 5/13/17 like? 5/14/17- Japanese tax regimes depress economy 5/14/17 yellowpage09 No Yes No 5/20/17 5/21/17- What happened ? 5/21/17 RappelzReborn No No No 5/27/17 Would any government allow foreign 5/28/17- currency to circulate in domestic 5/30/17 johnyj No Yes No 6/3/17 economy? 6/4/17- Record High Margin Debt With Most 6/5/17 galdur No No No 6/10/17 Traders Betting Against This Market 6/11/17- You don't need to do any fancy integer 6/17/17 slaveforanunnaka1 No No No 6/17/17 sequencing.... just add 7 6/18/17- Americans are getting stronger. Twenty 6/20/17 LiteCoinGuy No No No 6/24/17 years ago, ... 6/25/17- Crypto Bloodbath 6/26/17 Mincache No No No 7/1/17 7/2/17- ...was that the dip ... now the bubble 7/3/17 jubalix No No No 7/8/17 7/9/17- BTC and other currency on the 7/11/17 skalarax No No No 7/15/17 downfall 7/16/17- To sell all?? 7/16/17 IgorWK No No No 7/22/17 7/23/17- Why BTC will never be over 30K 7/27/17 MiBambino No No No 7/29/17 7/30/17- About BCC (Bitcoin's Cancer Cell) 8/2/17 Nekrobios No No No 8/5/17 8/6/17- r0ach proven right - Bitcoin market is a 8/7/17 r0ach No No No 8/12/17 Gox-style fraud controlled by Bitfinex 8/13/17- The biggest bitcoin crash ever has 8/13/17 kwukduck No No No 8/19/17 begun. Bitcoin has soared to new Heights , 8/20/17- Now the Crash is starting , R U 8/22/17 AztekPhoenix No No No 8/26/17 READY????? 8/27/17- When will the bubble burst? 8/29/17 Justaguy2 No No No 9/2/17 9/3/17- China banned companies from raising 9/4/17 SONG GEET No Yes No 9/9/17 funds through ICO 9/10/17- If $3381 doesn't hold, may go to $2500 9/14/17 nitinator No No No 9/16/17 9/17/17- Bitcoin without China 9/19/17 Wind_FURY No Yes No 9/23/17 9/24/17- Are we in a bull trap? We’re forever 9/27/17 CoinratZ No No No 9/30/17 blowing bubbles 10/1/17- Bitcoin rise is over 10/3/17 zokora No No No 10/7/17 10/8/17- 5500 Dollar Bubble or fork effect? 10/13/17 Bitcall No Yes No 10/14/17 10/15/17- BTC drop after fork 25th 10/17/17 traderperspective No No No 10/21/17 10/22/17- -- "Bitcoin will implode"... 10/23/17 No No Yes 10/28/17 PrettyCryptoGurl--

41 10/29/17- Why bitcoin can never go past $7000 10/29/17 Atomise No No No 11/4/17 11/5/17- Bitcoin price will down 11/6/17 myangm No No No 11/1117 11/12/17- Bitcoin Will Crash Below $3000. 11/13/17 thinair No No No 11/18/17 11/19/17- Fraud Showing up on Bitcoin Weekly 11/24/17 venezuelanxx No No No 11/25/17 Graphs 11/26/17- Bitcoin go Down 11/29/17 Bitcall No No No 12/2/17 12/3/17- The Bitcoin CRASH is coming! 12/7/17 Get-paid.com No No No 12/9/17 12/10/17- YOU ARE ALL STUPID - SELL NOW 12/10/17 superdave17 No No No 12/16/17 12/17/17- Bitcoin crash 12/19/17 Kryptogeek No No No 12/23/17 12/24/17- Bitcoin price after South Korea moves 12/28/17 hugeblack No Yes No 12/30/17 to regulate cryptocurrency trading 12/31/17- Is it the end...? 1/4/18 Enjel No No No 1/6/18 1/7/18- 2018 Cryptocurrency Crash (Elliott 1/8/18 xxxx123abcxxxx No No Yes 1/13/18 Wave) 1/14/18- SELL EVERYTHING!!!!! 1/17/18 vladimir21 No No No 1/20/18 1/21/18- The pathetic state of Bitcoin Core and 1/22/18 kwukduck No No No 1/27/18 why it will crash. 1/28/18- India just BANNED Bitcoin? Will BTC 2/1/18 alaxey18 No Yes No 2/3/18 now crash? 2/4/18- Bitcoin Price 7200 USD Is Real Price 2/5/18 Red Fish No No No 2/10/18 Now - It Will Go Down Later This Year 2/11/18- [Bearish] Bitcoin Risks Crashing to $900 2/13/18 bbc.reporter No No No 2/17/18 If Dot-Com Mania Is Any Guide 2/18/18- BTC will go downwards again after 2/23/18 AICoin_Official No No Yes 2/24/18 current consolidation 2/25/18- Is bitcoin still in a strong downtrend ? 2/27/18 gaincoin No No No 3/3/18 3/4/18- Overall trend remains bearish, your 3/8/18 AICoin_Official No No No 3/10/18 thoughts? 3/11/18- Bitcoin bubble 'just about to burst,' 3/15/18 bbc.reporter No No Yes 3/17/18 major money manager says 3/18/18- BTC Price < $3000 soon 3/20/18 dinhbiplus No No No 3/24/18 3/25/18- Bitcoin will go down! 3/25/18 GhostWithin No No No 3/31/18 4/1/18- bitcoin down trend to 3000 4/5/18 hwarico No No No 4/7/18 4/8/18- Market is slowly degrading 4/13/17 batrocio No No No 4/14/18 4/15/18- Bumpy Road Ahead Despite Strong 4/15/17 bbc.reporter No No No 4/21/18 Rally

42 4/22/18- BTC Struggling to Reach Over 9K 4/23/18 Elysian_ELY No No No 4/28/18 4/29/18- 7k by tonight Sunday 4/29/18 imapessimist No No No 5/5/18 5/6/18- 5/6/18 No No Yes 5/12/18 Just sold all my BTC because Tilbrook007 5/13/18- Fundstrat price predictions wrong 5/19/18 No No Yes 5/19/18 again! HabBear 5/20/18- 5/26/18 No Yes No 5/26/18 Price manipulation brawdias Bitcoin has sunk deep now Ripple CEO 5/27/18- say your beloved Bitcoin soon 5/30/18 KingScorpio No No Yes 6/2/18 insignificant 6/3/18- BTC will drop to $1000 --- you have 6/4/18 No No No 6/9/18 been warned. eth9888 6/10/18- 6/11/18 No No No 6/16/18 BTC TO 1K$. alexey14 South Korean exchange hacks causing 6/17/18- Bitcoin price drops, but less 6/20/18 No Yes No 6/23/18 consequential. xali

* Categories are represented in numerals for simplification. Category “1” represents FOMO, Category “2” represents Government policies, laws, and regulations, and Category “3” represents CEOs, business professionals, and entrepreneurs

Appendix F

Categorized Bitcoin Forum Posts with Positive Outlook

Week Title Date Author 1* 2* 3* 12/4/16- Bitcoin prices could leap to $2000 in 12/7/16 sherbaz07 No Yes Yes 12/10/16 2017? 12/11/16- touch down to 800$ is near 12/17/16 mundang No No No 12/17/18 12/18/16- Holy crap heading past $1,000 !!! 12/23/16 fuckingidiot3 Yes No No 12/24/16 12/25/16- Bitcoin Is about 1,054$ in preev 12/28/16 mr.bitcoinerf11 No No No 12/31/16 now!!! 1/1/17- Why Bitcoin price may not crash like 1/4/17 hl5460 No Yes No 1/7-17 2013 1/8/17- Buy at $780-800 USD 1/11/17 spazzdla No No No 1/14/17 1/15/16- Will Bitcoin break $2000? because of 1/20/17 digitokash No Yes Yes 1/21/17 Trump?

43 1/22/17- Price climbing fast again 1/26/17 BillyBobZorton Yes No No 1/28/17 1/29/17- it IS time for rise 2/1/17 BrewMaster Yes No No 2/4/17 2/5/17- After the usual PBOC bullshit routine. 2/8/17 cellard No Yes No 2/11/17 Uptrend continues. 2/12/17- Economist predicts Bitcoin $25,000 2/12/17 HabBear No Yes Yes 2/18/17 2/19/17- Bitcoin to 1400 (forecast) 2/21/17 guy_wonderful No No No 2/25/17 2/26/17- Learn from others mistakes. Hodl 3/2/17 calkob No No Yes 3/4/17 3/5/17- Bitcoin Prices for March 2018, March 3/9/17 btc_zep No No No 3/11/17 2019 and March 2020 and why. 3/12/17- Bitcoin on its way to $1,300 3/12/17 BillyBobZorton Yes Yes No 3/18/17 3/19/17- Almost 1,100 3/21/17 topper26 No No No 3/25/17 3/26/17- Bitcoin Price Prediction 2017 3/27/17 chrishaiden66 No No No 4/1/17 4/2/17- [UPDATE] $1,800 HIT (Next goal is 4/7/17 Humanxlemming No Yes No 4/8/17 $1,900) 4/9/17- BTC doing good after this big dump 4/13/17 cellard No No No 4/15/17 4/16/17- effect of Japan on bitcoin price 4/16/17 Herbert2020 No Yes No 4/22/17 speculation 4/23/17- BTC ETF SEC APPROVED on MAY 4/27/17 eight888 No Yes No 4/29/17 15th 4/30/17- nice press on bitcoin in argentina 4/30/17 tspacepilot No Yes Yes 5/6/17 today 5/7/17- A bitcoin Like Solution on CNBC for 5/9/17 kggservices No Yes No 5/13/17 Greece 5/14/17- Bitcoin should outperform any 5/15/17 johnyj No No No 5/20/17 investment long term wise 5/21/17- Gold Losing It's Shine? 5/21/17 bornii267645 No No Yes 5/27/17 5/28/17- Financial Firms Investigating Bitcoin 6/3/17 Possum577 No No Yes 6/3/17 "Tech" 6/4/17- Bitcoin has entered Wall street 6/8/17 MightyStorm No Yes No 6/10/17 officially? 6/11/17- Bitcoin classified as a currency. No 6/15/17 jurij.timofejev No Yes No 6/17/17 VAT for BTC also in Switzerland. 6/18/17- When and how will Bitcoin reach a 6/19/17 BigBoy89 No No No 6/24/17 trillion dollar market cap? 6/25/17- Japan ends 8% consumption tax on 7/1/17 topper26 No Yes No 7/1/17 bitcoin Today ayurvedicurea2 just few well know investors and then 7/2/17-7/8/17 7/7/17 No No No boom! growtaller 7/9/17- Just DO. NOT. SELL. Bitcoin... we 7/9/17 Dafar Yes Yes No 7/15/17 can ALL be rich!

44 7/16/17- ou should by Buying BTC NOT 7/17/17 BitcoinBarrel No No No 7/22/17 Dumping it! SMH 7/23/17- Goldman Sachs predicts Bitcoin may 7/27/17 the_poet No Yes Yes 7/29/17 get as high as $3600 in the next wave 7/30/17- Bitcoin: A big ride is about to come 8/1/17 iamTom123 No No No 8/5/17 8/6/17- Still don't believe BTC can reach 5K, 8/12/17 virtualdn No No No 8/12/17 then 10K and then 50K? 8/13/17- Bitcoin is going slowly to 40,000$ and 8/13/17 crocozino Yes No No 8/19/17 more 8/20/17- Legendary Bitcoin Trader “masterluc” 8/21/17 real_links No No Yes 8/26/17 Predicts $15,000 Bitcoin This Year 8/27/17- Max Keiser: Bitcoin’s going to be 8/29/17 allthingsluxury No Yes Yes 9/2/17 worth a trillion dollars soon! Chinese ban bitcoin news is 100% 9/3/17-9/9/17 9/8/17 BrewMaster No Yes No pure bullshit 9/10/17- Bitcoin to hit the $30.000 mark before 9/13/17 mrjuice No No Yes 9/16/17 2020 9/17/17- New Spring for BTC - Storm has 9/17/17 swiftblade No No No 9/23/17 ended 9/24/17- I See bitcoin at $10,000 before end of 9/25/17 Idrisu No Yes Yes 9/30/17 this year. 10/1/17- A bull market looms on the horizon 10/6/17 Lucid717 No No No 10/7/17 10/8/17- Bitcoin will be 10k in the next 6-10 10/11/17 2double0 No No Yes 10/14/17 months! 10/15/17- Bitcoin is falling, But don't worry! 10/18/17 cryptocoinplay No Yes Yes 10/21/17 10/22/17- Big News From China 10/26/17 adam1230 No Yes No 10/28/17 10/29/17- $70,000 anyone? 11/2/17 DustyRah No No No 11/4/17 11/5/17- Fork gone! BTC to $10k in 2017 11/8/17 thecodebear No No No 11/1117 guaranteed! 11/12/17- Bitcoin will increase to $100,000 says 11/18/17 masterbt No No Yes 11/18/17 expert 11/19/17- Bitcoin for $1 Million !!! In ten years? 11/22/17 cuteman No No No 11/25/17 Let's get real, $20k by April, $50k+ 11/26/12/2/17 11/29/17 thecodebear No No No 2018, $100k+ 2019 12/3/17- BTC 20K+ 12/7/17 mcan No No No 12/9/17 12/10/2017- NOW IS THE TIME TO BUY!! 12/10/17 Sccit No Yes No 12/16/17 12/17/17- DON'T PANIC. HOLD YOUR 12/22/17 yenimailb No No No 12/23/17 BITCOIN. 12/24/17- Bitcoin will rise during the Christmas 12/24/17 VancityBitcoin No No No 12/30/17 holidays 12/31/17- Peter Thiel & Bitcoin 1/3/18 hugeblack No No Yes 1/6/18 1/7/18- Bitcoin could ‘easily double’ in 2018, 1/10/18 bbc.reporter No No Yes 1/13/18 says Fundstrat’s Tom Lee

45 WHY I BELIEVE BITCOIN WILL 1/14/18- REACH A NEW ALL TIME HIGH 1/16/18 vladimir21 No No No 1/20/18 VERY SOON. 1/21/18- Transaction fees going down~ 1/24/18 DustyRah No No No 1/27/18 Smile! There are no worst possible 1/28/18- scenarios. We've already survived the 1/31/18 patispace No No No 2/3/18 worst! 2/4/18- Bitcoin in 2018 will be at $50,000 2/5/18 abaidudez No No Yes 2/10/18 2/11/18- Bitcoin to Millionaire! 2/14/18 sann111 No No No 2/17/18 2/18/18- BIG BTC PUSH RIGHT NOW 2/22/18 olyone1211 Yes No No 2/24/18 2/25/18- A tip by Bill Gates: buy Bitcoin 2/28/18 Lionel No No Yes 3/3/18 3/4/18- Why this panic selling is good 3/7/18 pereira4 No No No 3/10/18 3/11/18- Buy bitcoin for future 3/17/18 honghuy No Yes No 3/17/18 Bitcoin Hitting $91,000 By March 3/18/18- 2020 - Tom Lee, Fundstrat Global 3/19/18 TheQuin No No Yes 3/24/18 Advisors Bitcoin going moon starting from 3/25/18- June. Don't sale your Bitcoin right 3/28/18 Coolcryptovator No No No 3/31/18 now !! Bitcoin downtrend is limited. Here's 4/1/18-4/7/18 4/2/18 Canis Majoris No No No why. 4/8/18- The importance of staying positive, no 4/8/18 Canis Majoris No No No 4/14/18 matter what (the price is) 4/15/18- Bitcoin in Bullish Mode After ‘Tax 4/18/18 Goozzi No No No 4/21/18 Day’ 4/22/18- BTC 20K coming soon, watch this 4/26/18 mikeywith No No No 4/28/18 chart and ease your mind :D 4/29/18- Bulls are back 5/5/18 virendarnagpal No No No 5/5/18 5/6/18- Bitcoin may continue to move higher 5/6/18 salman21 No No No 5/12/18 5/13/18- BTC Price $15000 in July 5/15/18 mwaqar17 No No No 5/19/18 5/20/18- BTC Demand>BTC Supply= High 5/20/18 elemosho.crypto No No No 5/26/18 Priece of BCT. 5/27/18- Still think it can hit 20k !! be 5/27/18 brawdias No No Yes 6/2/18 optimistic 6/3/18-6/9/18 Bad news for Bitcoin 6/4/18 Fawez No No Yes 6/10/18- McAfee Predictions... 6/10/18 ynclksnr321 No No Yes 6/16/18 6/17/18- I need more money to invest now! 6/22/18 Buttermellow No No No 6/23/18

46 * Categories are represented in numerals for simplification. Category “1” represents FOMO, Category “2” represents Government policies, laws, and regulations, and Category “3” represents CEOs, business professionals, and entrepreneurs