Study Proves That Bitcoin Prices Are Highly Influenced By Social Media’s “Silent Majority”

The researchers claim that positive comments about the cryptocurrency by users on social media platforms are likely to increase the upside potential of the cryptocurrency. Bitcoin is arguably the most popular and most controversial cryptocurrency in the market and this has a lot to do with it being the first digital coin to be launched. Its performance has attracted world recognition. For example, it was valued at around $500 in 2014 and it managed to surge above $19,000 before losing its gains and is now valued at around $6,200.

The team of researchers involved in the study at the Stevens Institute of Technology discovered that the value of Bitcoin can be manipulated easily through public sentiments especially through social media. However, according to the research findings, it is the silent majority that has a bigger impact on the price of Bitcoin and not the vocal minority.

The team of researcher involved in the study was led by Professor Feng Mai. The professor and his team were determined to prove his theory that periods characterized by a lot of positive sentiments had an influence on the surging Bitcoin prices.

The comments and tweets posted by highly active users on social media platforms do not have much of an impact on the price of Bitcoin. However, comments by the silent majority usually cause a significant impact on price movement for the cryptocurrency. The researchers compiled and evaluated data collected over a span of two years from Bitcointalk, the most popular Bitcoin forum in the world.

How the researchers came to the conclusion?

The collected comments were grouped into positive, negative and other categories based on sentiments through natural language techniques. The researchers also collected Twitter data spanning months. This includes more than 3.4 million tweets about Bitcoin. The changes to the price of Bitcoin were also compared to the type of conversations happening around the time of the changes. The team of researchers involved in the study also discovered that the price of Bitcoin can also affect the type of conversations taking place on social media platforms especially the talk by those who frequently post content related to Bitcoin.

“Vocal users of social media may sometimes have a certain agenda, in this case hyping or boosting the price of Bitcoin because they themselves have invested in it,” stated Professor Mai.

The professor further pointed out that most of the comments relating to Bitcoin on social media are biased because they were posted by people who have invested in the cryptocurrency. This means that they do not reflect the actual value of the cryptocurrency. The researchers concluded from the study that the silent majority are the real influencers. This is the first research study proving the link between social media and the price of cryptocurrencies such as Bitcoin. Social media thus plays a significant role in the price of digital coins.