Paper: arXiv 2401.10238

Authors: Ana Fernández Vilas, Rebeca P. Díaz Redondo, Daniel Couto Cancela, Alejandro Torrado Pazos

Abstract

Cryptocurrencies are a type of digital money meant to provide security and anonymity while using cryptography techniques. Although cryptocurrencies represent a breakthrough and provide some important benefits, their usage poses some risks that are a result of the lack of supervising institutions and transparency. Because disinformation and volatility is discouraging for personal investors, cryptocurrencies emerged hand-in-hand with the proliferation of online users’ communities and forums as places to share information that can alleviate users’ mistrust. This research focuses on the study of the interplay between these cryptocurrency forums and fluctuations in cryptocurrency values. In particular, the most popular cryptocurrency Bitcoin (BTC) and a related active discussion community, Bitcointalk, are analyzed. This study shows that the activity of Bitcointalk forum keeps a direct relationship with the trend in the values of BTC, therefore analysis of this interaction would be a perfect base to support personal investments in a non-regulated market and, to confirm whether cryptocurrency forums show evidences to detect abnormal behaviors in BTC values as well as to predict or estimate these values. The experiment highlights that forum data can explain specific events in the financial field. It also underlines the relevance of quotes (regular mechanism to response a post) at periods: (1) when there is a high concentration of posts around certain topics; (2) when peaks in the BTC price are observed; and, (3) when the BTC price gradually shifts downwards and users intend to sell.

Complexity vs Empirical Score

  • Math Complexity: 2.5/10
  • Empirical Rigor: 5.5/10
  • Quadrant: Street Traders — practical and empirical, lighter on theory

Why this score: The paper investigates sentiment and user activity on Bitcointalk in relation to Bitcoin price movements. While mathematically straightforward, it offers empirical value by analyzing social forum dynamics during key market events and price fluctuations.

Research Flowchart

  flowchart TD
    A["Research Question: Relationship between Bitcointalk Forum Activity & BTC Value Fluctuations"] --> B["Data Collection: BTC Market Data & Bitcointalk Forum Posts / Quote Activity"]
    B --> C["Data Analysis: Correlate Sentiment, Post Volume, & Quotes with Price Trends"]
    C --> D["Behavioral & Event Detection: Analyze Topic Concentration, Peaks, & Downtrends"]
    D --> E["Outcomes: Forum Data Explains Financial Events, Detects Anomalies, & Predicts Price Shifts"]

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0 of 31 cited works are in the corpus; resolved via arXiv source bundles, Semantic Scholar and OpenAlex. Corpus-wide: 2518 linked papers.