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A Discourse Analysis of Tweets and Its Implications for Cryptocurrency Prices and Trade Volumes

Author

Listed:
  • Kamyr Gomes Souza

    (Federal University of Uberlândia)

  • Flavio Barboza

    (Federal University of Uberlândia)

  • Daniel Vitor Tartari Garruti

    (Federal University of Uberlândia)

Abstract

Recent advancements in cryptography and digital assets have triggered a profound transformation, causing a reorganization of the financial sector. The growing popularity of cryptocurrencies as investment instruments has raised concerns regarding the influencer mentions on social media impact on their price dynamics. This study assesses the discourse surrounding major cryptocurrencies and tokens within the decentralized finance (DeFi) and masternode sectors, examining its influence on prices and trading volumes during the period from 2019 to 2021. The study verifies the alignment between social media communications concerning these assets and their intended objectives. The analysis utilizes KHCoder software to explore topics with the highest public engagement, revealing that DeFi users frequently exhibit herd-like behavior by actively pursuing high-return farming trends, often at the expense of unique project attributes. In contrast, discourse surrounding masternode tokens more closely adheres to project objectives. The study employs panel models and Granger causality tests to investigate the relationship between cryptocurrency market performance, interactions on social media, and tweet sentiment. The findings substantiate a causal and temporal connection between micro-discourses on Twitter and asset prices, as well as trading volumes.

Suggested Citation

  • Kamyr Gomes Souza & Flavio Barboza & Daniel Vitor Tartari Garruti, 2024. "A Discourse Analysis of Tweets and Its Implications for Cryptocurrency Prices and Trade Volumes," Computational Economics, Springer;Society for Computational Economics, vol. 64(4), pages 2355-2383, October.
    • Handle: RePEc:kap:compec:v:64:y:2024:i:4:d:10.1007_s10614-023-10504-1
    DOI: 10.1007/s10614-023-10504-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Discourse analysis; Sentiment analysis; Twitter; Cryptocurrencies; Masternodes; Decentralized Finance;
    All these keywords.

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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