A Discourse Analysis of Tweets and Its Implications for Cryptocurrency Prices and Trade Volumes

Kamyr Gomes Souza (), Flavio Barboza and Daniel Vitor Tartari Garruti
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Kamyr Gomes Souza: Federal University of Uberlândia
Flavio Barboza: Federal University of Uberlândia
Daniel Vitor Tartari Garruti: Federal University of Uberlândia

Computational Economics, 2024, vol. 64, issue 4, No 14, 2355-2383

Abstract: Abstract Recent advancements in cryptography and digital assets have triggered a profound transformation, causing a reorganization of the financial sector. The growing popularity of cryptocurrencies as investment instruments has raised concerns regarding the influencer mentions on social media impact on their price dynamics. This study assesses the discourse surrounding major cryptocurrencies and tokens within the decentralized finance (DeFi) and masternode sectors, examining its influence on prices and trading volumes during the period from 2019 to 2021. The study verifies the alignment between social media communications concerning these assets and their intended objectives. The analysis utilizes KHCoder software to explore topics with the highest public engagement, revealing that DeFi users frequently exhibit herd-like behavior by actively pursuing high-return farming trends, often at the expense of unique project attributes. In contrast, discourse surrounding masternode tokens more closely adheres to project objectives. The study employs panel models and Granger causality tests to investigate the relationship between cryptocurrency market performance, interactions on social media, and tweet sentiment. The findings substantiate a causal and temporal connection between micro-discourses on Twitter and asset prices, as well as trading volumes.

Keywords: Discourse analysis; Sentiment analysis; Twitter; Cryptocurrencies; Masternodes; Decentralized Finance (search for similar items in EconPapers)
JEL-codes: C8 D83 D84 G12 G14 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10614-023-10504-1

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