![]() Moreover, fundamental analysis, technical analysis, investment planning, and all the rationality assumptions of the modern financial theories are irrelevant in the current scenario of Bitcoin investment. In addition, bubbles can emerge faster and more robustly due to irrational herding, social pressure, and bandwagon effect (Kaiser & Stockl, 2020). We can also see an excessive optimism in investors who may be influenced by the intentional digital nudges through social networking forums in the BTC market. This may sometimes lead to overvaluation or undervaluation. The existence of herding in the crypto market and the non-existence of an intrinsic value makes it harder to identify Bitcoin's fair value by the investors. Hence, the BTC market cannot be predicted according to economic valuation models such as the fundamental and technical analyses. The fundamental price of Bitcoin is zero, as there is no intrinsic value associated with Bitcoin (Cheah & Fry, 2015). Our research also tries to find out the trend variation in price by taking qualitative and quantitative data, which makes this article novel and unique.īitcoin is a digital currency that is not backed by any tangible or intangible assets of intrinsic value (Reserve et al., 2018). We compare the quantitative data of the BTC market with the corresponding qualitative data and assess the insights of the relationship between the frequency of emotions and the time-series line-up of BTC prices. Naturally, a question arises: are the sentiments of investors responsible for the crash of Bitcoin? In this paper, we address this question by examining the effect of these sentiments on the BTC market. ![]() This sudden fall in the BTC value shows the influence of a single tweet on the value of the world’s largest cryptocurrency. Experts blame Musk's tweets for the great fall of the BTC market. ![]() Bitcoin fell by 40% from its record high levels of $65,000 to $31,000 on the same day. ![]() Tesla CEO Elon Musk’s tweet on saying that his company would no longer accept Bitcoins started the BTC market meltdown. They are sliding down and climbing up continuously. Wołk ( 2019) also supported this argument, explaining further that the cryptocurrency price depends heavily on social media sentiments and web search analytics tools such as Google Trends.Ĭurrently, cryptocurrency holders worldwide are in a panic as the Bitcoin prices are fluctuating wildly. There is a correlation between Bitcoin’s price and changes in search query volumes of people (Karalevicius et al., 2018). Sentiments-investors’ thoughts, feelings, and moods regarding an asset-influence the BTC market prices. However, the price of Bitcoin is influenced by market sentiments (Eom et al., 2019). Many investors are attracted to Bitcoin due to its high liquidity, low transaction costs, and easy transaction across the internet (Zheng et al., 2019). A vital characteristic of the cryptocurrency market is that currency prices fluctuate based on people’s perceptions and opinions. Twelve years after its inception in 2008 by the pseudonymous coder Satoshi Nakamoto, Bitcoin price has been skyrocketing to unprecedented heights. We have also observed an artificial investment intention in the form of digital nudges playing the field of the Bitcoin market to boost investment.īitcoin is exhibiting tremendous growth in value and popularity. Our research shows a crossmatch between quantitative trends on Bitcoin market prices and qualitative matrix of sentiments. We also used search data from Google Trends for providing further insights. For strengthening the findings of qualitative analysis, we used quantitative data of the BTC market. For analysing market sentiments, the posts and sentiments from 2016 to 2021 of an internet forum “Bitcointalk” were used. Both the qualitative and quantitative data of time periods 2016–2021 were examined to find whether the Bitcoin market prices are influenced by market sentiments. Are the Bitcoin prices influenced only by market sentiments or do any factors influence them? In this paper, we applied a triangulation approach mixed-methods research was used in which a qualitative study was complemented by a quantitative method. The Bitcoin market witnessed a crash during the second quarter of 2021 that was purely guided by the investors’ sentiments. ![]() Bitcoin (BTC) prices are fluctuating continuously to the extremes. ![]()
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