Bitcoin’s value may have reached a new low on Sunday, but research proves that social media could do the trick to bring the coin back to its feet. A new study conducted by the Stevens Institute of Technology uses natural language processing and social media analytics to suggest that the coins could be moving per social media trends.

Stevens School of Business professor Feng Mai said that social media posts could possibly have an effect on crypto prices, confirming the research group’s hypothesis. Four universities came together for the research — the other three include Ivey Business School, Dickinson College and the University of Cincinnati. They analyzed data from the most popular forum on cryptocurrencies, Bitcointalk. Using a Python script, the team collected comment data from the forum and classified them into positive, negative and other sentiments using natural language processing. The research was published in the Journal of Management Information Systems.

They also collected data from Twitter over two months, analyzing over 3.4 million tweets about Bitcoin. They used VECM, a vector error correction method used by statisticians that compared social media chatter with cryptocurrency price. They also factored in volatility indexes, gold prices and S&P 500 index to account for indicators that may approve their methods.

Mai noted:

“It’s not a one-way relationship. Any changes in Bitcoin’s price are obviously going to affect the sentiment around it, so we needed to factor in those influences as well.”

He added:

“Many of us probably intuitively believe this, but this was the first robust statistical finding to verify that social media and Bitcoin prices are actually linked.”

The research team further classified data between people who tweeted frequently and those who didn’t. They noticed that a handful of accounts were producing over 60% of the total sampled posts. Mai noted that most people who posted frequently had an agenda for a cryptocurrency, for instance trying to hype the price of Bitcoin. As they could be already invested in the currency, their data could make the results more biased.

Mai said:

“We wanted to know who is affecting the price: a vocal minority, who may be biased, or the quieter majority, who do not seem to have a reason to be untruthful or both.”

Bitcoin investors are not just recognizing posts with hidden agendas but also discounting them before making their decisions. The team noted that tweets or comments from very active users did not have a significant impact on prices. Instead, there exists a “silent majority,” which could move prices by 10x upon posting positive comments. This majority, which doesn’t actively participate in conversations, is the one moving prices the most. And they are making very calculated decisions about their investments.

New Research Shows Social Media’s Influence on Cryptocurrencies was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

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