Introduction
This article discusses how social media affects Bitcoin prices. Hope that by the end of this article, you’ll better understand the relationship between cryptocurrency and social media. While it is impossible to predict which way the two technologies will ultimately go, believing that the crypto future will be determined by how well they work together. Maybe visit bit-trader.io to register and start buying and selling or using this virtual currency for daily transactions.
Influence of social media on Bitcoin
Social media is a powerful influencer on the pricing value of cryptocurrencies. Recent studies have shown positive social media commentary can significantly impact Bitcoin prices. The study also found that the silent majority on social media can influence substantially. One study showed that infrequent users moved Bitcoin prices by as much as 10 percent when they posted positive comments. On the other hand, negative commentary has the potential to drag Bitcoin prices down. Negative remarks about Bitcoin can affect investor confidence and discourage the public from trading or investing in the cryptocurrency.
There are several ways to measure social media’s influence on cryptocurrency prices. One method is to use news stories related to four major macroeconomic indicators. News stories relating to GDP and CPI did not have a statistically significant relationship with Bitcoin returns. Mai et al. examined dynamic relationships between Twitter and Bitcoin performance in another study. This study used multiple user groups and various social media platforms.
Another method is to look at the trending topics on social media. As Facebook and Twitter users share their interests, the most popular issues become trends. These trends can last a few hours, days, or weeks. In some cases, they are positive, leading to a surge in Bitcoin prices.
Influential public figures are well aware of the power of their social media influence. They have learned how to sway public sentiment by pumping their favorite stocks or coins. This type of social influencing can increase the understanding of disruptive technologies and help to drive social good. Furthermore, in the age of Bitcoin, influencers have begun to use their social clout to positively impact Bitcoin sentiment.
Influence of social media on Bitcoin price
Social media is a powerful way to get insight into Bitcoin market trends, and one recent study showed a strong correlation between positive sentiment and a rising Bitcoin price. Researchers looked at 3.4 million tweets about Bitcoin over two months and classified the comments as positive, negative, or neutral. They also looked at two years’ worth of forum posts on the Bitcointalk forum. They found that social media chatter had a ten-fold influence on Bitcoin price.
As more people become aware of the value of bitcoin, news about it spreads rapidly. As a result, the price of bitcoin rises or drops dramatically. Many developers are studying the effects of social media on cryptocurrency price trends. While the positive impact of social media on Bitcoin are well-known, there are also risks to the cryptocurrency’s value.
Positive social media commentary drives up the Bitcoin price. This positive commentary comes from the silent majority of social media users. Studies have shown that a single tweet by a frequent user could move the price by ten percent. Meanwhile, negative social media commentary drags the price down. These negative comments may lead to discord among investors and discourage the public from investing or trading in cryptocurrency.
Conclusion
Social media has the potential to influence the pricing value of cryptocurrency in several ways. One of them is by spreading news and information. When big stories in the cryptocurrency industry go viral, they can influence people’s buying and selling decisions, leading to dramatic price fluctuations. For instance, recent news of a hack in Hong Kong’s Bitfinex exchange caused a 20% drop in bitcoin’s value. While social media has many positive effects on crypto, it can also have negative consequences.
Cryptocurrency brands can use social media to their advantage by creating buzz about their new offerings. The crypto community loves to be kept up to date, and is eager to hear about any new updates. If a brand is able to take advantage of this, they can create tons of engagement with a single update.