Bitcoin in the Headlines is a weekly look at global bitcoin news, analysing media coverage and its impact.
Ever-hungry for product launches and splashy funding rounds, the mainstream media was sent into a frenzy this week as Circle announced the closure of its $50m round and Coinbase confirmed it was expanding across the pond to the UK.
Despite seemingly good news for the bitcoin ecosystem, misreporting – and inaccuracies – featured across most outlets. Meanwhile, some journalists also questioned the need for substantial funding rounds, given that some startups were not highly concerned with return of investment (ROI).
CoinDesk takes a look at this week’s top bitcoin-related headlines.
Misreporting on the money
An investment bank like Goldman Sachs pouring money into a bitcoin company was always going to capture the media’s attention, as such investments legitimise the currency in the eyes of naysayers.
So it comes as no surprise that a quick google news search featuring the words ‘bitcoin’ and ‘Goldman Sachs’ brought up over 90 news articles since the announcement was published yesterday.
The New York Observer‘s Jack Smith IV wrote a piece titled It’s Happening: Goldman Sachs Just Dropped $50 Million Into a Bitcoin Startup, with ‘Bitcoin fanatics always knew this day would come’ as a somewhat sensationalist sub-heading.
Smith began his article noting:
“It was only last year that Goldman Sachs was telling investors that bitcoin wasn’t safe store of value. Looks like they’ve come around.”
Well, the mega investment bank published a report that claimed that bitcoin could shape the future of finance just last month.
With regards to the $50m claim, no one can deny Sachs’ involvement but, as reported by CoinDesk, Boston-based Circle also drew support from investors such as China-based IDG Capital Partners, as well as an existing pool, including Breyer Capital, General Catalyst Partners and Accel Partners.
In this instance, it seems that the Observer’s headline is somewhat misleading.
Wall Street piqued by bitcoin
Shelly Banjo’s Quartz piece is a more elaborate – and accurate – exposé.
With the headline Goldman Sachs is parking millions in a bitcoin business with no pressing plans to make money, Banjo nods to the sentiment that some companies in the bitcoin ecosystem are conducting large funding rounds without launching revolutionary – or profitable – products.
“Allaire [Jeremy] would not disclose any details of its business model with Quartz, explaining that the company is not concerned with making money.”
According to the piece, serial entrepreneur Allaire is planning on monetising in the future, but at the moment his main concern is building “a big enough social network”.
As for Goldman Sach’s involvement, well Banjo quiet rightly pointed out that this “seems to be in keeping with the threat that fast-growing mobile payment companies pose to traditional banks.”
Banks are increasingly paying attention to blockchain technology, but remaining exceedingly tight lipped – some may say cautious – about bitcoin.
The Wall Street Journal‘s Paul Vigna frames Wall Street’s growing interest in the technology rather poetically with his piece Goldman Sachs, Like Others on the Street, Dips a Toe in Bitcoin.
“If you haven’t heard it yet, Wall Street’s interest has been piqued by bitcoin.”
Deprived from relatively exciting announcements or product launches for most of last week, media outlets also jumped at the chance to cover Coinbase’s expansion to the UK.
The move by the San Francisco-based bitcoin exchange follows the UK Treasury’s announcement that it plans to regulate the digital currency following the election.
Writing for The Guardian, Alex Hern, noted:
“But while the cryptocurrency, with its pseudonymous aspects and anti-state roots, is popular amongst the darker side of the finance world, there are many players who want to bring it into the light. Coinbase is the biggest.”
Another example of how reporters are still talking about bitcoin as something that is continuously embroiled with the darker, less desirable, more illicit spectrum of finance.
Despite this, just this week we saw how bitcoin was being used to rally funds for Nepal’s Earthquake appeal, testament to the currency’s use-case in the aftermath of a natural disaster, but also an example of how it can revolutionise the world of micropayments.
Newspaper image via Shutterstock.