The Effect of Social Media Analytics on Crypto Coins
Social media continues to profoundly impact industries. Especially
technology are at the top of these sectors. Much of the growth and popularity in the cryptocurrency sector is found in interacting with social media.
The first steps of digital and cryptocurrencies are often taken in a very close relationship, from social media forums to mainstream social media channels. As the diversity of cryptocurrencies has increased and blockchain technology has developed, their interaction with each other has also increased. There are even blockchain-based social networks.
From forums to the main social media channels such as Facebook, Twitter, Pinterest, Instagram, and others, cryptocurrencies are trending. Social media is the platform for most people to get news. News, comments, analyzes and shares constitute a phenomenon that both increases and decreases the demand. To give an example of this in particular, two-thirds of American adults get their news from social media. Through social media is also leading to an increase in the popularity of digital and cryptocurrencies.
As articles, news, and updates on cryptocurrencies and technology are constantly fed through social media, the future looks bright in terms of the crypto-social media relationship.
The most frequently used platform with which we can data social media searches is Google Trends. The data extracted through Google trends has a great impact on the increase in both prices and the number of wallets. Google Trends is an app that shows you how often search for search words are searched. This makes it an important tool used in the research of keywords. It can be used to track trends, see current search queries, or predict and evaluate ups and downs that may be seasonal.
According to Google Trends data at the end of November,
rose above $ 19,400, while Bitcoin searches in 2020 rose to an annual high. According to data collected by Brad Michelson, senior marketing manager of major trading and investment platform eToro, the monthly global volume for Bitcoin searches during the December 2017 bull run remained at lower levels than the November 2020 data.
What Does Google Trends Data Mean for Crypto Money Prices?
According to Google Trends data, the more active a cryptocurrency is on social media and search engines, the more severe its price action can be. Although it is not always on the upside, the search of new investors for crypto coins can create a positive result for the price. Social media and other media organizations can cause fluctuations in prices according to the nature of the news.
According to research conducted on Google Trends, a strong causal relationship was found between prices and the terms searched. The most important thing is that this relationship is two-way. Not only do search queries affect prices, but also prices affect search queries. Speculation and trend following, which clearly dominates the cryptocurrency price dynamics, deepens prices even more. Increasing interest is moving prices upwards. On the other hand, if prices are below trends, it indicates that increased interest is the emergence of an observed bubble behavior for cryptocurrencies.
Since social media affects almost everything, it will also continue to influence the future of cryptocurrencies. The development of blockchain technology may cause changes in the existing social media structure. It will also offer solutions to many social media problems. A blockchain-based social media network can offer operations in a way that is truly decentralized and closed to external referrals. Blockchain-based social channels can help users protect their personal and online data and habits.