Bitcoin is currently the largest and most traded cryptocurrency. In just two decade its has increased in value and popularity at an unprecedented rate. At the time of writing, the Bitcoin price is at $62312 with a market cap of $1.172 trillion. Also, it has a daily volume of $34.993 billion with about 18.863 million bitcoins in supply. Bitcoin has become so valuable and stable in the market that financial analysts refer to it as the digital gold.
Despite being the largest crypto, Bitcoin is very volatile and reactive to tweets and messages from Crypto sharks and celebrity influence. One tweet from Elon musk saying he has bought Bitcoin will cause a bullish rally of the dollar.
In fact, Bitcoin has hit most of its all time highs as a reaction to tweets by influencers. This phenomenon is called social listening. Companies like the Lunar Crush have developed algorithms that track social listening by tracking the social mentions of crypto at a specific time. This is called machine learning.
Calculating Bitcoin Social Listening
Lunar Crush can monitor all the private and public media and also the social media for the public perception and the social mention of Bitcoin. Using this data, they will calculate the social dominance of Bitcoin across media platforms. An example of this is:
- Social mention of Bitcoin – 5,000,000 mentions
- Social mention of the Entire cryptocurrency market – 100,000,000 mentions
- Bitcoin social dominance = 100,000,000/ 5,000,000 = 20%
Analysts can use this to predict future Bitcoin prices and its trend in the time of the mentions.
How Social Listening and Public Sentiment Impact Bitcoin Price?
In this social media age, Crypto Sharks and celebrities can use social media to change the public sentiment and perception of Bitcoin. This will, in turn, affect the Crypto price and Volatility. Elon Musk’s company tweeted that they will stop taking bitcoin payments. After the tweet, the Bitcoin prices went bearish from $60000 levels to $40000. This is an example of Social listening negatively affecting Bitcoin prices.
Korean scientists Han Woo Park and Sejung Park did a research titled “Relations Between Reputation and Social Media Communication in Crypto Market.” They stated that the more the social mention of Bitcoin, the volatile it becomes and the less the social mention, the less volatile it was. Another research by Gourang Aggarwal calculated the relationship between Bitcoin and influencers. The calculation had a negative correlation value of 0.0631 to indicate that any negative news from an influencer will cause Bitcoin prices to drop.
Tweets That affected The Bitcoin Price
Most of Bitcoin public sentiment has been affected by the CEO of Tesla Elon Musk. In May 2021, Musk tweeted that Tesla will stop taking Bitcoin payments.
Bitcoin dropped by almost 15% after this tweet. In Mid May, he tweeted that Tesla had not sold Bitcoin.
This stopped the bearish rally that Musk had caused and pushed the prices up to $45,000. A week after this, He tweeted telling North American miners to adopt more environmentally friendly ways of mining.
This pushed the price up by 4%. On June 3, Musk tweeted a picture showing he is breaking up with Bitcoin to join another Crypto. The prices dropped by 5%. On June 13, Musk tweeted that Tesla might start accepting Bitcoin payments if the miners adopt clean energy. The tweet pushed Bitcoin prices by 8%.