Interplay between Cryptocurrency Transactions and Online Financial Forums

TL;DR

This work investigates how cryptocurrency forum activity on Bitcointalk relates to Bitcoin price dynamics in a largely unregulated market. By building TALK-DS (Bitcointalk data) and BTC-DS (daily BTC prices) and applying time-series cross-correlation analyses, the study reveals that forum signals—especially post/topic ratios and quotes—exhibit lead-lag relationships with BTC prices, offering short-term predictive potential up to about three days. The analysis extends to related cryptocurrencies, revealing strong forum-price coupling for Ethereum and Litecoin and highlighting the role of coordinated discussions around peaks and dumps. The findings support the notion that social-forum data can inform investment risk assessment and motivate future predictive modeling, sentiment analysis, and provenance-based credibility scoring within an investor-facing dashboard, while acknowledging limitations such as non-causality and regime-specific effects.

Abstract

Cryptocurrencies are a type of digital money meant to provide security and anonymity while using cryptography techniques. Although cryptocurrencies represent a breakthrough and provide some important benefits, their usage poses some risks that are a result of the lack of supervising institutions and transparency. Because disinformation and volatility is discouraging for personal investors, cryptocurrencies emerged hand-in-hand with the proliferation of online users' communities and forums as places to share information that can alleviate users' mistrust. This research focuses on the study of the interplay between these cryptocurrency forums and fluctuations in cryptocurrency values. In particular, the most popular cryptocurrency Bitcoin (BTC) and a related active discussion community, Bitcointalk, are analyzed. This study shows that the activity of Bitcointalk forum keeps a direct relationship with the trend in the values of BTC, therefore analysis of this interaction would be a perfect base to support personal investments in a non-regulated market and, to confirm whether cryptocurrency forums show evidences to detect abnormal behaviors in BTC values as well as to predict or estimate these values. The experiment highlights that forum data can explain specific events in the financial field. It also underlines the relevance of quotes (regular mechanism to response a post) at periods: (1) when there is a high concentration of posts around certain topics; (2) when peaks in the BTC price are observed; and, (3) when the BTC price gradually shifts downwards and users intend to sell.

Figures (17)

• Figure 1: Overview of the experiment.
• Figure 2: Number of posts per rank (boxplot).
• Figure 3: Distribution of activity and merit per rank (box-plots).
• Figure 4: The influence of time of posts.
• Figure 5: The influence of the time of the year.