Gaining legitimacy is crucial in the nascent market of cryptocurrencies, often through means such as adopting analogies. For instance, cryptocurrencies are often compared to gold because of their inflation-hedging traits. Studies have demonstrated the benefits that analogies yield in legitimizing a nascent market. However, not all analogies are effective, and it is unclear how different rhetorical appeals influence their efficacies. To examine these issues, we hypothesize that analogical narratives focusing on the similarities between cryptocurrencies and inflation hedge positively influence the popularity of cryptocurrencies, whereas narratives emphasizing the dissimilarities have a negative influence. Furthermore, we examine how different rhetorical appeals influence the effectiveness of similarity-based and dissimilarity-based analogies, and we hypothesize that the former is strengthened by ethos rhetorical appeals and the latter is strengthened by logos rhetorical appeals. To test our hypotheses, we analyze a sample of 678 cryptocurrencies, 4,303 stocks, and 1,417 relevant news articles from January 2020 to August 2022. The empirical results support our hypotheses. Overall, our study contribute to enriching the understanding of analogies in the legitimization of nascent markets by showing that analogies are double-edged swords and elucidating the asymmetric moderation effects of rhetoric on similarity-based versus dissimilarity-based analogies.
