The cryptocurrency market responds to speculation, whether it is the price of Bitcoin or any important announcement that has the ability to push a coin’s price and market cap upwards. The cryptocurrency market, unlike other asset classes, depends significantly on market sentiment, noted Joshua Frank, CEO of The TIE, in an interview with Dawid Paluch.
“In crypto, the only thing that influences the price is the wisdom of the crowd or what people think.”
With technologies to identify market sentiment now available, The TIE is making headway in identifying such trends. According to Frank, one of their Co-founders is the CEO of Social Market Analytics [SMA], a leading provider of Twitter sentiment. SMA is an important player in identifying the reactions any crypto-news gets on Twitter, and it is one of five Twitter partners worldwide with access to Twitter Firehouse.
“We’ve seen that the correlation between sentiment and price movement for crypto is incredibly strong.”
Chain Link, for example, was not spoken about much in October 2018. However, it’s a different case now. There was a massive change in trend and sudden conversations sparked positive sentiment about the project at the beginning of 2019. Its price saw the impact of this positive sentiment, growing by 12x, noted Frank.
“Conversations became so much more positive. It is not a rule, but almost always, when that happens, it leads to a massive spike in prices. We saw the same thing with Raven Coin a couple of years ago, and with a bunch of other coins.”
However, due to the lack of people using crypto [According to The TIE report, only 1% of the population uses crypto], this sentiment is not too significant. Among the major problems users face on different platforms were user experience. However, with growing tech and feedback from users, platforms have been taking some steps in this regard. Despite the UI and UX improving however, the main hurdle for crypto-adoption remains a lack of education and understanding of the complexity of the matter.