The Predictor Impact of Web Search Media on Bitcoin Trading Volumes

Abstract

In the last decade, Web 2.0 services such as blogs, tweets, forums, chats, email etc. have been widely used as communication media, with very good results. Sharing knowledge is an important part of learning and enhancing skills. Furthermore, emotions may affect decisionmaking and individual behavior. Bitcoin, a decentralized electronic currency system, represents a radical change in financial systems, attracting a large number of users and a lot of media attention. In this work, we investigated if the spread of the Bitcoin’s price is related to the volumes of tweets or Web Search media results. We compared trends of price with Google Trends data, volume of tweets and particularly with those that express a positive sentiment. We found significant cross correlation values, especially between Bitcoin price and Google Trends data, arguing our initial idea based on studies about trends in stock and goods market.