Is bitcoin’s market predictable? Analysis of Web search and social media

In recent years, Internet has completely changed the way real life works. In particular, it has been possible to witness the online emergence of web 2.0 services that have been widely used as communication media. On one hand, services such as blogs, tweets, forums, chats, email have gained wide popularity. On the other hand, due to the huge amount of available information, searching has become dominant in the use of Internet. Millions of users daily interact with search engines, producing valuable sources of interesting data regarding several aspects of the world. Bitcoin, a decentralized electronic currency, represents a radical change in financial systems, attracting a large number of users and a lot of media attention. In this work we studied whether Bitcoin’s trading volume is related to the web search and social volumes about Bitcoin. We investigated whether public sentiment, expressed in large-scale collections of daily Twitter posts, can be used to predict the Bitcoin market too. We achieved significant cross correlation outcomes, demonstrating the search and social volumes power to anticipate trading volumes of Bitcoin currency.