Understanding Cryptocurrency’s Recent Surge in Growth
by Samuel M Kim
In the past few years, cryptocurrency has been strongly embraced by many as an alternative currency as well as an investment opportunity. However, it still remains controversial, as many are concerned of its malignant uses in society. This article will provide a price analysis on Bitcoin, the world’s leading cryptocurrency by market cap, as well as a sentiment analysis of tweets on cryptocurrency.
The visualization above depicts the historical price of Bitcoin from 2015 to the present. At the beginning of 2021, Bitcoin crossed a milestone, as its price reached $40k for the first time. Even though the economy as a whole has suffered due to the COVID pandemic, Bitcoin has experienced explosive growth since early 2020.
2019 Avg. Closing Price: $7395
2020 Avg. Closing Price: $11,125 (50% increase from 2019 avg. price)
2021 Avg. Closing Price: $48,427 (335% increase from 2020 avg. price)
What do People think about Cryptocurrency on Twitter?
Data was collected using a Twitter API and the rtweet package. 5,000 tweets were analyzed for each sentiment analysis.
The visualization above depicts the top 15 most frequently used words in tweets that include the word “crypto” or “cryptocurrency”. The word “project” is the most commonly used with a count of 1030, followed by the word “bitcoin” with a count of 820.
The visualization on the left reveals the ratio of positive to negative words from a sentiment analysis using the Bing lexicon. Positive considerably outweighs negative. This overall positive sentiment aligns with the growth and acceptance of cryptocurrency.
The visualization on the left depicts the top 10 positive words in tweets that include the word “crypto” or “cryptocurrency”. The Bing lexicon was utilized for this sentiment analysis. The most commonly used positive word was “good” with a count of 558.
The visualization on the left depicts the top 10 negative words in tweets that include the word “crypto” or “cryptocurrency”. The Bing lexicon was utilized for this sentiment analysis. The most commonly used negative word was “delay” with a count of 73.
What do People think about Bitcoin?
Bitcoin is the leading cryptocurrency by market cap. The cryptocurrency has experienced exponential growth over the COVID shutdown. This section will provide a sentiment analysis of Bitcoin tweets to understand peoples’ attitudes. This is especially important for Bitcoin, since price is largely dictated by peoples’ attitudes.
The visualization above depicts the top 10 most frequently used words in tweets that include the word “bitcoin”. The word “crypto” is the most commonly used with a count of 1060, followed by the word “btc” with a count of 979.
The visualization on the left reveals the ratio of positive to negative words from a sentiment analysis using the Bing lexicon. The significantly more positive over negative sentiment reflects the recent success Bitcoin has been experiencing.
The visualization on the left depicts the top 10 positive words in tweets that include the word “bitcoin”. The Bing lexicon was utilized for this sentiment analysis. The most commonly used positive word was “successful” with a count of 358.
The visualization on the left depicts the top 10 negative words in tweets that include the word “bitcoin”. The Bing lexicon was utilized for this sentiment analysis. The most commonly used negative word was “hard” with a count of 42.
Conclusion
The recent success of cryptocurrency shows much promise. The more trust people have that cryptocurrencies are safe, the stronger the cryptomarket will become. Currently, sentiment on Twitter is overwhelmingly positive. Next steps for this analysis would be to scrape text from other popular online social platforms, such as Reddit, to gain a more comprehensive understanding of what other people are thinking about cryptocurrency.