Predicting the cryptocurrency market using social media metrics and search trends during COVID-19

Jian Mou, Wenting Liu, Chong Guan, J. Christopher Westland and Jongki Kim ()
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Jian Mou: Pusan National University
Wenting Liu: Singapore University of Social Sciences
Chong Guan: Singapore University of Social Sciences
J. Christopher Westland: University of Illinois - Chicago
Jongki Kim: Pusan National University

Electronic Commerce Research, 2024, vol. 24, issue 2, No 21, 1307-1333

Abstract: Abstract Bitcoin is one of the most well-known cryptocurrencies worldwide. Recently, as the COVID-19 pandemic raged globally, a new wave of price volatility and interest in Bitcoin was witnessed. Identifying the roles played by different information sources in the emergence and diffusion of content through Internet resources can reveal the influential factors affecting cryptocurrencies’ value. This study aims to reveal the forces behind cryptocurrencies’ monetary value—the market price movements on major exchanges before, during, and post the March 2020, COVID-19 market crash. The daily prices of the two largest cryptocurrencies, Bitcoin and Ether, were obtained from CoinDesk. By integrating Google Trends data, we found that Google searches increase when the number of tweets on COVID-19 soars, with a one-period lag (one day). Furthermore, search trends have a significant impact on cryptocurrencies’ future returns such that increased (decreased) searches for a negative event indicate lower (higher) future cryptocurrency prices.

Keywords: Cryptocurrency; COVID-19; Social media; Search trends (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10660-023-09801-6

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