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The impact of Reddit user sentiment on bitcoin returns: checking the Reddit phenomenon existence with RedditSI

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  • Valeriia Baklanova

Abstract

In recent years, the bitcoin market has witnessed exponential growth in investor activity, coupled with a heightened influence of investor sentiment on BTC market dynamics. This study explores the role of Reddit in shaping user sentiments and influencing investment decisions within the bitcoin market. The research introduces Reddit sentiment index (RedditSI) as a tool to measure sentiment among Reddit users. The index was constructed based on comments from top discussions in the bitcoin-related subreddits that were classified by tonality using the NLP model Flair. The study employs statistical analysis methods, including correlation, cointegration, and causality, as well as event study analysis to examine the relationship between RedditSI and BTC market performance. The results indicate a significant impact of RedditSI on bitcoin returns, revealing both short-term and long-term relationships between them. Notably, the RedditSI outperforms the well-known crypto fear and greed index, underscoring its significance in gauging market mood and influencing trading patterns.

Suggested Citation

  • Valeriia Baklanova, 2026. "The impact of Reddit user sentiment on bitcoin returns: checking the Reddit phenomenon existence with RedditSI," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 35(2), pages 119-155.
    • Handle: RePEc:ids:gbusec:v:35:y:2026:i:2:p:119-155
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