Categories: Bitcoin Business

Money Managers Are Paying Big Bucks to Interpret Your Bitcoin Tweets

Click here to view original web page at cointelegraph.com

Algorithms that can decode market sentiment are making waves in the institutional crypto landscape, a July 17 report from Reuters claims.

An Arms Race for Algorithms

With the resounding return of Bitcoin’s (BTC) volatility amid an ever-hotter crypto market, hedge funds and asset managers are increasingly turning to software developers to help them interpret and harness sentiment signals to their advantage.

Bin Ren — CEO of Alan Howard-owned Elwood Asset Management — told Reuters that the soaring interest in developing algorithms capable of identifying price clues from the tumultuous social media landscape has become akin to “an arms race for money managers.”

While A.I. and other software-driven sentiment analysis has long been an accepted tool in traditional financial markets, Reuters argues that crypto’s nativity to the internet makes the asset class potentially an ideal fit for such algorithmic parsing tools.

Moreover, the crypto sector isn’t served by centralized sources of information — such as central banks — that can traditionally provide economic indicators and financial statements for investors to interpret.

The price of so-dubbed sentiment analysis algos is undeniably steep. As Andrea Leccese, president of New York-based investment firm Bluesky Capital told Reuters, even a robot that can parse just anglophone Twitter can cost between $500,000-$1 million a pop, largely in developer fees.

‘Similar to Modeling the Spreading of a Virus’

This fragmentation and vibrancy of the social media landscape — extending beyond Twitter to Reddit, Russian-developed Telegram, Japan’s Line, Korea’s Kakao and China’s WeChat, and many others — presents significant complexity for the Sherlocks of sentiment analysis.

According to data from BitInfoCharts, Bitcoin-centric Tweets clock in at 22,784 daily as of press time and subscribers to Reddit’s main Bitcoin forum are at almost 1.1 million.

It isn’t impossible to finding method in the madness of this proliferation, Elwood’s Ren told Reuters, given that the “information propagates not randomly, but through a very well-defined structure [...] like a tree.” He added: “It’s very similar to modeling the spreading of a virus.”

As Cointelegraph has reported, a Q1 2019 survey from Big Four auditor PwC found that quantitative funds — who avail themselves of both sentiment analysis and other tools — managed to secure higher overall returns than their rivals.

This June, Fidelity-backed crypto analytics firm Coin Metrics partnered with Social Market Analytics to develop on a feed of real-time sentiment towards crypto based on Twitter data.

With the resounding […]

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama

Recent Posts

Should You Use MST Gift Cards at US Casinos?

US-facing online casinos don’t exactly feature a robust selection of deposit methods. Most gaming sites only offer a couple of… Read More

28 mins ago

Bitcoin {BTC} the reigning asset: Why Gold Barons and Value Investors constantly shun the king coin

Warren Buffett is a popular investor who was once one of the richest men in the world. He has claimed… Read More

28 mins ago

Bitcoin’s Bull Run Could Be Just Getting Started—Here’s Why

Bitcoin has soared so far this year, with the bitcoin price rising more than 200% since the beginning of the… Read More

28 mins ago

Late Hal Finney Predicted $10 Million Per BTC After Satoshi Release

Although some Bitcoin critics will spite anyone who believes that the cryptocurrency will be worth more than 1000× its current… Read More

6 hours ago

Bitcoin {BTC} adoption: Booking.com chief as well as U.K. Central Bank leader are optimistic about virtual currencies

Bitcoin is placed right at the top of the market, with the BTC dominance rate currently at 68.7%. The trading… Read More

6 hours ago

Top Pro Athletes Like Messi Would Make a Killing in Bitcoin Earnings

According to Messari research, Lionel Messi's take-home pay would be "12,700 $BTC" annually. Cristiano Ronaldo's would be 10,000 bitcoins. |… Read More

6 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More