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When Bitcoin encounters information in an online forum: Using text mining to analyse user opinions and predict value fluctuation

Author

Listed:
  • Young Bin Kim
  • Jurim Lee
  • Nuri Park
  • Jaegul Choo
  • Jong-Hyun Kim
  • Chang Hun Kim

Abstract

Bitcoin is an online currency that is used worldwide to make online payments. It has consequently become an investment vehicle in itself and is traded in a way similar to other open currencies. The ability to predict the price fluctuation of Bitcoin would therefore facilitate future investment and payment decisions. In order to predict the price fluctuation of Bitcoin, we analyse the comments posted in the Bitcoin online forum. Unlike most research on Bitcoin-related online forums, which is limited to simple sentiment analysis and does not pay sufficient attention to note-worthy user comments, our approach involved extracting keywords from Bitcoin-related user comments posted on the online forum with the aim of analytically predicting the price and extent of transaction fluctuation of the currency. The effectiveness of the proposed method is validated based on Bitcoin online forum data ranging over a period of 2.8 years from December 2013 to September 2016.

Suggested Citation

  • Young Bin Kim & Jurim Lee & Nuri Park & Jaegul Choo & Jong-Hyun Kim & Chang Hun Kim, 2017. "When Bitcoin encounters information in an online forum: Using text mining to analyse user opinions and predict value fluctuation," PLOS ONE, Public Library of Science, vol. 12(5), pages 1-14, May.
    • Handle: RePEc:plo:pone00:0177630
    DOI: 10.1371/journal.pone.0177630
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    Cited by:

    1. Xu Wang & Guohua Gan & Ling-Yun Wu, 2020. "Framework and algorithms for identifying honest blocks in blockchain," PLOS ONE, Public Library of Science, vol. 15(1), pages 1-14, January.
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    3. Flori, Andrea, 2019. "News and subjective beliefs: A Bayesian approach to Bitcoin investments," Research in International Business and Finance, Elsevier, vol. 50(C), pages 336-356.
    4. Parthajit Kayal & Purnima Rohilla, 2021. "Bitcoin in the economics and finance literature: a survey," SN Business & Economics, Springer, vol. 1(7), pages 1-21, July.
    5. Kraaijeveld, Olivier & De Smedt, Johannes, 2020. "The predictive power of public Twitter sentiment for forecasting cryptocurrency prices," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 65(C).
    6. Zhang, Dingxuan & Sun, Yuying & Duan, Hongbo & Hong, Yongmiao & Wang, Shouyang, 2023. "Speculation or currency? Multi-scale analysis of cryptocurrencies—The case of Bitcoin," International Review of Financial Analysis, Elsevier, vol. 88(C).
    7. Young Bin Kim & Kyeongpil Kang & Jaegul Choo & Shin Jin Kang & TaeHyeong Kim & JaeHo Im & Jong-Hyun Kim & Chang Hun Kim, 2017. "Predicting the Currency Market in Online Gaming via Lexicon-Based Analysis on Its Online Forum," Complexity, Hindawi, vol. 2017, pages 1-10, December.
    8. Lahmiri, Salim & Bekiros, Stelios, 2019. "Cryptocurrency forecasting with deep learning chaotic neural networks," Chaos, Solitons & Fractals, Elsevier, vol. 118(C), pages 35-40.
    9. Edson Pindza & Jules Clement Mba & Sutene Mwambi & Nneka Umeorah, 2023. "Neural Network for valuing Bitcoin options under jump-diffusion and market sentiment model," Papers 2310.09622, arXiv.org.
    10. Abeer ElBahrawy & Laura Alessandretti & Andrea Baronchelli, 2019. "Wikipedia and Digital Currencies: Interplay Between Collective Attention and Market Performance," Papers 1902.04517, arXiv.org, revised Mar 2019.
    11. Ahmed, Walid M.A., 2022. "Robust drivers of Bitcoin price movements: An extreme bounds analysis," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    12. Gil Cohen, 2022. "Algorithmic Trading and Financial Forecasting Using Advanced Artificial Intelligence Methodologies," Mathematics, MDPI, vol. 10(18), pages 1-13, September.
    13. Pardis Roozkhosh & Alireza Pooya, 2024. "Dynamic Analysis of Bitcoin Price Under Market News and Sentiments and Government Support Policies," Computational Economics, Springer;Society for Computational Economics, vol. 64(2), pages 1163-1198, August.
    14. Lars Steinert & Christian Herff, 2018. "Predicting altcoin returns using social media," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-12, December.
    15. Andrea Flori, 2019. "Cryptocurrencies In Finance: Review And Applications," International Journal of Theoretical and Applied Finance (IJTAF), World Scientific Publishing Co. Pte. Ltd., vol. 22(05), pages 1-22, August.
    16. Gianfranco Tusset, 2023. "How the Cryptocurrency Discourse is Changing: A Textual Analysis," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2023(2), pages 31-52.
    17. Fathin Faizah Said & Raja Solan Somasuntharam & Mohd Ridzwan Yaakub & Tamat Sarmidi, 2023. "Impact of Google searches and social media on digital assets’ volatility," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-17, December.

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