Companies develop an algorithm in social media to study the cryptocurrency market

Crypto News

In order to learn more about advanced technology companies and crypto-currency markets widely discussed in social media, hedge funds and managers decide to create an algorithm.

Analyze cryptocurrency trends with an algorithm

Hedge funds and asset managers are showing increasing interest in cryptocurrencies.

Businesses analyze social media to identify the least signs and influencers that affect the movement of bitcoin prices (BTC) and altcoins.

Many investors are already using computer models that detect price differences on crypto-currency trading platforms.

By analyzing the feelings of Internet users, it is perfectly possible to predict price fluctuations. This technique is already used in the traditional finance sector.

As a result, stocks and exchanges are studied through social media comments and publications.

The comments of Internet users and the degree of optimism, satisfaction and interest mentioned on the internet are reliable tools because the internet is widely used on a global scale.

 “Sentiment Analysis” could then be used in the study of the cryptocurrency market according to Reuters.

Especially since making the difference between reliable information and rumors is a laborious task in a world where everyone can broadcast information freely on networks.

A considerable investment

Analyzing all social media costs time and money. The study of the feelings of users of Reddit, Twitter, Telegram and many other platforms require exorbitant funds.

According to Andrea Leccese , the president of the investment firm Bluesky Capital , it would take between $ 500,000 and $ 1 million to get a robot able to read Twitter in English.

Yet the vast majority of funds will already be mobilized in hiring qualified developers. Also, given the number of relevant social media channels, the investment required is excessively high.

On the other hand, the algorithm should be able to identify inaccurate information biases published on platforms such as Facebook and Twitter.

Do you think that the use of algorithms is a good idea to study Bitcoin trends based on the feelings of users? React in the comments below.

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