Crypto investors could potentially predict the price of Bitcoin by analysing the emojis used in social media posts, academics have discovered.
A team of researchers from universities in China, Europe and Taiwan have discovered a correlation between the use of positive emojis such as the thumbs up (👍), chart increasing (📈) or fire (🔥) icons in tweets and upward moves in the price of BTC.
The rocket emoji (🚀) was discovered to be a particularly “potent symbol of optimism within the crypto social media landscape, embodying the anticipation of upward market movements”.
However, getting in touch with your emojis is not enough to forecast price crashes.
There was a less significant correlation between plunges in the value of Bitcoin and the use of emojis with negative sentiments such as a green heart (💚), chart decreasing (📉) or money with wings (💸).
The researchers found that negative social media sentiments are “less impactful” or “overshadowed” by positive sentiments in their “ability to predict market movements”.
Connecting emojis with the movements of the crypto market
“This finding enriches our understanding of market dynamics, highlighting the asymmetric influence of positive versus negative sentiment in the cryptocurrency domain,” they wrote in a paper published on Arxiv.
To make the link between emojis and Bitcoin prices, researchers first collected a dataset of tweets related to cryptocurrencies, specifically focusing on posts that contained both the keyword “crypto” and various emojis. This dataset was collected between November 8, 2023, and January 28, 2024, capturing a wide array of sentiments expressed by Twitter users discussing the cryptocurrency market.
The team then carried out a multimodal sentiment analysis using ChatGPT and a BERT (Bidirectional Encoder Representations from Transformers) model, which is a deep learning language model used in natural language processing (NLP) experiments.
Emojis were translated into sentiment data, reflecting the emotional content of the tweets.
The team selected the top five tweets with the highest sentiment scores from a daily set of 50, and then calculated their average sentiment score.
This analysis demonstrated that tweets with highly positive sentiments could serve as predictors of upward movements in Bitcoin’s price.
“The positive correlation between high sentiment scores, derived from the aggregation of top 5 tweets’ emojis, and subsequent Bitcoin price movements suggests that emojis serve as a real-time barometer of public sentiment towards the cryptocurrency market,” the researchers wrote.
The first study to make a link between social media sentiment and the price of crypto was published way back in 2018, when one single Bitcoin cost just $6,000.
Feng Mai, a professor at Stevens’ School of Business, found that periods of positive social media commentary “significantly influence the rising price of Bitcoin”, although they found that the “silent majority, not the vocal minority” were responsible for shifting the prices.
Tweets from active users did not move Bitcoin’s price “much at all”, whereas infrequent users moved prices as much as ten times more when they posted positive comments.
“They are the ones investors watch,” said Mai, whose work appeared in the Journal of Management Information Systems.
“This was the first robust statistical finding to verify that social media and Bitcoin prices are actually linked,” Mai says. “It may be intuitive, but positive sentiment moves Bitcoin prices.”
How does social media affect the Bitcoin market?
Mai’s team collected and analyzed two years’ worth of forum posts on Bitcointalk as well as two months’ worth of Twitter data, including more than 3.4 million tweets about Bitcoin.
Mai’s team then compared changes in Bitcoin’s price with the “chatter” around crypto and daily rises and falls in indicators such as the S&P 500 stock index, gold prices and volatility indexes.
They divided Bitcoin tweeters and posters into two groups: people who posted very frequently and lurkers who were less voluble.
They found the price was not changed by loudmouths by shifted in proportion to comments made by infrequent posters.
Mai added: “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. So, if most of the social messages around Bitcoin are generated by people who are biased, the sentiments on social media may not accurately reflect the currency’s actual value.”
“The silent majority are the real influencers in driving the value of Bitcoin It seems like investors get that.”
https://machine.news/fraudsters-weaponize-generative-ai-to-attack-businesses-and-consumers/: How to predict the price of Bitcoin using emojis, ChatGPT and tweets about crypto