Analyzing the effect of tweets by prominent personalities on the stock (crypto) market

Abstract

Various studies point out the correlation between the emotions of people and their behavior on social media platforms. Sentiment analysis provides a way to capture these emotions. A strong relation is observed between these emotions and decision-making process of individuals, including critical financial decisions. Rising environmental concerns related to mining of cryptocurrencies has embarked a need to shift towards greener alternatives. This study performs sentiment analysis of Twitter tweets related to sustainability and green energy for various cryptocurrencies and analyzes if there is a correlation of these sentiments with the price changes of these cryptocurrencies. The study models around the event of Elon Musk’s tweet dated 13th May 2021, which highlighted environmental and sustainability concerns around Bitcoin. Cardano, a green cryptocurrency, has proven to be the most sustainable in terms of price changes after the tweet. In this study, sentiment analysis is performed on tweets related to sustainability and green energy for various cryptocurrencies on a daily basis. The daily sentiments and daily closing price of the cryptocurrencies are analyzed to find if a correlation exists between them. A positive correlation has been observed between sentiments and the price changes for green cryptocurrencies. No such correlation was observed for non-green cryptocurrencies.