Back in 2014, Vox reporter Timothy B. Lee wrote a story for the site titled “Why I’m investing in bitcoins” in which he laid out the case for the cryptocurrency’s long-term viability and explained why he thought he would make a profit by owning some.
The backlash was swift. Vox had more than 20 million readers a month in 2014, according to its year-end update, while it was estimated that all the world’s bitcoins were owned by just 1.2 million people, so it’s not unrealistic to assume that Lee’s glowing article could have increased the value of his investment. There is no way to know if the article had any real impact, short or long term, but bitcoin was in the middle of a prolonged price fall when Lee wrote the story, and it did see a small bump the day after the article was published.
Traditionally, journalists aren’t allowed to invest in companies they cover. Lee’s boss Ezra Klein quickly reversed course, forcing Lee to sell his bitcoins and donate the proceeds to charity. “While I don’t think it’s impossible to fairly cover Bitcoin while also holding some Bitcoins, the reason to make these rules blunt and general, rather than nuanced and specific, is to ensure there’s no question about the motivations of the underlying coverage,” Klein wrote in an apology post.
Should reporters writing about bitcoin be allowed to own any? Opinion is split. Traditional media outlets forbid it. “We have a policy about financial reporters and their holdings, including bitcoin,” Tracy Grant, deputy managing editor at The Washington Post, said in an email. “Business reporters must disclose financial interests and cannot hold investments in companies or entities they might write about. So we would not allow a reporter who owns bitcoins to write about them.”
Meanwhile, the bitcoin and cryptocurrency trade media — which produce much of the best reporting on the topic — seem to consider it completely kosher, and even desirable, for reporters to have a stake in what they’re writing about. Of the major bitcoin-focused news outlets, only CoinDesk had a publicly available editorial policy about this issue. (CoinDesk, and other bitcoin outlets including CoinTelegraph, BTC Media, NewsBTC, and CryptoCoinsNews, did not respond by deadline when asked about it by email.)
Conflicts of interest from owners, advertisers, investors, and sources are also rolled up in the unsupervised world of bitcoin reporting.
CoinDesk’s policy is pretty thorough. The site does not endorse any cryptocurrency (this may sound obvious, but consider that NewsBTC’s ethics statement says, “We write about bitcoin news because we love bitcoin. Simple as that.”), and its writers are required to disclose holdings worth more than $500 in their site bios. They are also required to disclose when money was made in the course of reporting on a cryptocurrency, and additional disclosures are required in the context of its parent company’s holdings.
Other outlets aren’t that fastidious, however. Many independent outlets actually pay their writers in bitcoin. Coin Journal requires its writers to disclose any digital currency investments worth more than $1,000, except for bitcoin. (It also paid at least one of its writers, Ian DeMartino, in bitcoin, as he writes in his book, The Bitcoin Guidebook.)
Meanwhile, CryptoCoinsNews, also known as CCN, said in a letter to readers that “there is a longstanding policy requiring writers to declare their interests” and that editors have “refused stories based on conflicts of interest.” However, there is no stated policy on the site and no mention of this in its solicitation for writers. (The site does have the amazing disclosure that “Advertised sites are not endorsed by us. They may be unsafe, untrustworthy, or illegal in your jurisdiction.”)
I posed the question to r/bitcoin: Do you care if reporters are invested in a currency they are covering? The answer was basically no: Users felt that owning bitcoin was more likely to result in better coverage.
However, the bitcoin media has been at the center of controversy over conflicts of interest in the past. CoinTelegraph, another prominent bitcoin publication that takes a generally boostery tone, came under fire about a year ago when it came out that it had supposedly been funded by a proprietary cryptocurrency called ByteCoin. CoinTelegraph has no publicly stated policy on whether its writers can own bitcoin, and public statements by its writers suggest at least some of them were paid in bitcoin. A job listing doesn’t say anything about owning or not owning bitcoin. Coin Idol, which was started by CoinTelegraph alums, said in an email that its writers are “mostly Blockchain enthusiasts” so “of course, they use cryptocurrencies.”
Whether or not reporters own or disclose owning bitcoin may not be the biggest issue. Conflicts of interest from owners, advertisers, investors, and sources are also rolled up in the unsupervised world of bitcoin reporting, and almost everyone has the same incentive. If bitcoin gets bigger, everyone in this mini-industry profits. Writers from these outlets are also frequently pulled in as experts in the mainstream media; the Nasdaq blog even syndicates Bitcoin Magazine, a publication of BTC Media.
You could make the same criticisms about the business press, but more traditional outlets typically have stricter rules and their markets are less susceptible to media influence.
Bitcoin’s volatility after all these years is indicative of the tension between its use as an actual currency, which is rare, and its use as an investment vehicle by amateurs and professionals who collectively are extremely sensitive to world events. All this, plus the lack of a regulatory authority and persistent confusion about what bitcoin is and how it works, means that the currency’s perceived value is still heavily dependent on the media. Whether bitcoin media are any more corrupt and unreliable than for any other industry is debatable, but the question is more pressing as the currency continues to grow in influence (or at least not die).