Understanding the variation of cryptocurrency prices with online media trends

Abstract

Researchers, business groups, financial authorities, and legislators are all interested in blockchain technology and cryptocurrencies. Cryptocurrency is an electronic asset. It may be used to transfer money from peer to peer without a bank or other third party having to approve the transaction. According to the European Parliament (EP), a cryptocurrency is a digital representation of value that is protected by encryption. A decentralised system keeps track of and verifies all transactions made using cryptocurrency as the medium of trade. However, investors and cryptocurrency aficionados often express the opinion that digital currencies, particularly Bitcoin, may be utilised as a store of wealth. Numerous benefits of cryptocurrencies include auditability, decentralised transactions, and anonymity, to mention a few. However, authorities are worried about the use of cryptocurrencies for criminal activities including tax evasion, money laundering, and funding terrorism. As an example, the Chinese government declared cryptocurrency transactions to be unlawful, thereby outlawing all digital coins, including Bitcoin. The market for cryptocurrencies is expanding and gaining popularity, and there has been a noticeable rise in the amount of literature on the subject. There are several different threads in the literature on cryptocurrencies. The hedging capabilities of cryptocurrencies are the subject of the first body of research. In this report we analyse the relationship between bitcoin price and google trends keywords . The technical indicators of cryptocurrencies, macroeconomic data, events, and the media are only a few of the predictions that have been found. In addition to these indicators, trend-spotting in the literature has lately grown significantly in importance for forecasting cryptocurrencies. Trendspotting is made possible by big data technology, which gives investors access to real-time information and facilitates the decision-making process. Investors now routinely do internet research before making any kind of investing choice. As a result, search engines are a great resource for finding the most recent knowledge and information. The Google engine consistently receives the most traffic out of all search engines. As a result, Google Trends, a new kind of online big data, was developed by managing a vast array of Google search results. These patterns reflect public opinion on a certain search term. In particular, the ratio of a query's search volume to all Google searches is taken into account when determining the Google Trends scale, which ranges from 0 to 100. Google Trends are a particular kind of big data that include a variety of data. The evaluation of macroeconomic factors including financial assets, energy, economic activity, and unemployment has made extensive use of Google Trends. Google Trends' contribution to bitcoin forecasting is still in its infancy. Sentiment analysis and tweet volume have been extensively employed in prior research to forecast bitcoin prices. To further our knowledge, we're attempting to recreate the trend analysis for bitcoin.