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The relationships between RedditSI and BTC exchange characteristics: Do Reddit users still control the market?

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  • Valeriia Baklanova

    (HSE University)

Abstract

This study investigates the influence of Reddit community on Bitcoin market performance by introducing the Reddit Sentiment Index (RedditSI) as a tool to measure sentiment among Reddit users. The index was crafted based on the Bitcoin-related subreddits and classified with the Flair NLP model. Statistical analysis, including correlation, cointegration and causality tests, revealed significant relationships between RedditSI and BTC exchange characteristics (price, returns, absolute returns, volatility and volume), both in the short and long term. The findings highlight the importance of ongoing sentiment monitoring for investors, regulators and researchers to better understand the link between human psychology and cryptocurrency markets.

Suggested Citation

  • Valeriia Baklanova, 2025. "The relationships between RedditSI and BTC exchange characteristics: Do Reddit users still control the market?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 15(1), pages 285-306, March.
    • Handle: RePEc:spr:eurase:v:15:y:2025:i:1:d:10.1007_s40822-024-00304-9
    DOI: 10.1007/s40822-024-00304-9
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    More about this item

    Keywords

    Bitcoin (BTC); Investor sentiment; Natural language processing; Time series analysis;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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