Influence of Online Opinion on Cryptocurrency Fluctuations

The recent surge in popularity of cryptocurrencies has generated a lot of online interest, comments, and data. Since crypto coins are a less regulated system than the traditional stock market, I hypothesised that online opinion may be a strong predictor for changes in their value.

A study described in this PLOS publication has done something similar, but limited to several specific online communities/forums. I endeavoured to also include news articles, mentions and use of hashtags on Twitter, and comments on several relevant crypto communities on Reddit.

One of my aims was to analyse which news sources or posts occur first, and how wide their effect is on the other news sources and communities. If certain types of posts are consistently earlier than others, and a good predictor on changes in value, it could theoretically be used to make transactions before the rest of the market "catches up".

At this stage, my model has been successful at predicting some of the very large increases and drops in values of popular cryptocurrencies, but not always in a timely manner. This is a project I am continuing on working on and improving in my free time.